It's really not that niche though unless you think WoW was niche or any MMO really that tried to 'fix' the formula. Facts are facts.
How is it that the two people said it's ok to be niche, but you have to jump up and say "it's not niche though!"
Here's some facts, facts that were repeated on this board again and again: Most players of the original EQ are old now, with kids, a job and a lawn to mow on the weekend. Sure there is a certain target audience, or else there literally wouldn't be any of the TLP EQ servers again and again, however that audience fills two to three servers at max, and recycles people between each iteration.
There are certain people that claim that "once the players see the appeal of old school MMO design, people will reconsider and denounce modern McMMO's with instancing like WoW!"--to which the correct answer is always: "extraordinary claims require extraordinary evidence". Because right now market data seems to indicate that younger gamers have shorter attention spans and want more instant gratification, and don't want to sit around and meditate until they have enough mana to cast buffs on the group. They play LoL, Fortnite or Apex Legends instead. On their smartphone. So it remains to be seen if you can mobilize either an older audience, or the current young audience.
Frustration is part of motivation. Second and third tier guilds thrived on competitive servers because they catered to more casual players. You are saying that everyone wants everything now and they want to get it easily because reasons. That isn't true. There is a huge range of types of players.
You jumped a bit to conclusions there: I said that EQ embraced raids as a form of content, and that the initial design goal was character progression. But character progression through loot doesn't necessarily involve raids. In fact, most of the truly iconic items out of EQ came from group content, even in later expansions.
This of course circles back to the original claim that you don't need instancing, because ... yeah, why exactly? It looks like people claiming that always assume they can camp a spot 16 hours straight, because fuck the other players. It looks like most of them have forgot how the GM staff back in the day handled the "play nice policy" with "you have to share, or else!".
The game doesn't really have to be anything more than a fun way to get your exploration on with a solid chat function. I'm sure there will be more to it than that, but even if that's all it is a lot of people will be happy.
Do we want to discuss Bartle's taxonomy of player types again?