It would make hosting a "Family and/or friends" instance possible.

I do go back and forth on the accessibility tradeoffs of E2EE for average people though. In this scenario, lose or forget your key/password and you lose ALL of your photos which are very important to some people. Losing them is pretty catastrophic. Google Photos or iPhotos really gives people a sense of security about their photos.

ps: It would also make it easier to host cloud instances for Immich without encrypting the file system of a remote server/VPS. Especially when renting servers from small-time sellers, I'm always weary about how much I can really trust their employees access control. I know some level of trust is unavoidable with physical access, but how do they handle those disks during maintenance would also be relevant.