There are many examples of Internet radio/livestreams that do all the live studio work virtually. It would be so much cheaper and more flexible as guests just need a microphone and Internet connection. Getting good audio is not terribly difficult even with a laptop or phone's built in microphones. Positioning and some isolation do wonders for voice quality.

You are technically correct but taking that approach misses out on the purpose of community radio: community.

As a terrestrial radio station our goal is to serve and be a member of our the local San Fernando Valley community. Creating a physical space for the radio station is about creating a 3rd space for community members and hosts as much as it is for recording radio shows.