I don’t agree - while you could copy it, if an instance gathered a large user base and had some well-implemented quality of life features, there’s nothing stopping them from putting ads on it and I’d guess that most users would continue to use that instance. If it has quality content, they already have an account, and it has compelling improvements over other instances, I can’t imagine that some unobtrusive ads would bother people enough to go to a clone of that instance and create another account.

Sure, it could be done, and ad blockers are common enough, but I don’t think well-placed ads would cause some mass exodus. I’d even be okay with it if it’s in the name of paying the server bills for such an instance.