My personal (extremely small) instance with only a few users currently costs around $8 / month on a VPS. Still have plenty of headroom for more users as well I believe.

I see four options:

1. Server owner assumes all costs of the server. Possible if instance is not huge (ideal on a federated environment) or owner has money and will to do it.
2. Accept donations from users
3. Require paid subscription to access (and thus becoming private otherwise anyone could still access the server from a free instance)
4. Run ads on site. Same as 3, users would migrate.

So I only see 1 and 2 possible

I run a personal instance with only two human users and a couple of accounts each (admin and daily use). I use a DigitalOcean droplet with 2gb of memory and 80Gb of storage. With a dozen or so communities, my disk usage since July 4 is at about 12gb.

My total monthly cost with weekly backups is about $14 USD. If the storage demands keep going up, my cost will increase to about $19/month

Yeah, I have wondered also.... Just like if I wanted Usenet access I would expect to pay for it... There are costs involved, so how much?