The admins on many instances already went through an upgrade cycle about two weeks ago to account for the first influx of ex-redditors.
Some of them may already be at their maximum ability/affordability.
I think others in the thread are correct that moving to different instances will probably help reduce some of the overhead that's slowing things down for many.
Not necessarily. New users gravitate towards established, large instances, such as lemmy.world and lemmy.ml. Expanding horizontally would just create a few laggy and overflowing instances, and a bunch of tiny instances no one uses.