I don't know if any of those "tons of reasons" are actually valid; checking the top 10 multiplayer games on Steam by player count all of them allow player hosted servers.

Well, I can give several reasons why player hosted servers (like on their own machines) can be a bad idea:

* If the server player quits, the game is over, or the game developer has to implement host migration, which generally sucks. Game developers would prefer to spend this money and time making the game more fun instead.

* If the server player cooks a burrito in the microwave and is playing over wifi, maybe everybody's connection gets really bad for 60 seconds.

* At least in the USA, internet connections are highly asymmetric. It's getting better now, but 10-20 years ago, the vast majority of players would only have enough bandwidth to send and receive one client's worth of bandwidth, and would not be able to upload bandwidth for all players, especially as player counts increased.

* Cheating. The player hosting the server on their machine (if a PC) could modify code and/or memory to cheat.

* Lag switching / network shaping. The player hosting the server could time out, lag out or ruin the experience for a player they don't like.

* Host advantage. The final one is that the player hosting the server has zero lag, so has a huge advantage over other players.

For a competitive game at least, it's much better in 2026 to host your servers somewhere secure, or to have player hosted servers in a secure provider that doesn't let players do any of the things above.