Seems like a reasonable position? If your goal is a safe welcoming community, cutting users who do not fit that initiative makes sense. If someone is racist or insulting, regardless of if they have donated or you see an influx of people with similar ideals, it is against the goals and objectives of the instance and the community they wish to foster. So, cutting them off seams appropriate.
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i can understand where they're coming from
if your instance was called lemmy.freds.com, and your goal was to create an instance purely for people called fred to use; it would be understandable to remove people who claimed to be called fred, and then it turns out they actually aren't
now i don't know what instance this is, but say it's lemmy.dbzer0.com - if a user is going around decrying piracy, or reporting copyright infringement on lemmy to authorities; i think it would be reasonable to remove them
Growth is important to an extent of having stability
But past that some instances don't really desire to be the mainstream go-to site.
They want a certain type of environment for their instance. There’s nothing wrong with this at all.
The users are only keeping the instance alive if they’re donating to its costs.
Not necessarily, good content and users who share and comment help servers indirectly. An empty or toxic instance will most likely not attract too many users who will donate.
The local content doesn’t matter if it’s federating everywhere. I agree the toxic stuff should be handled. That’s only common sense.