It’s a good idea to host your own instance (if you can) for a number of reasons, depending on your own skillset and level of knowledge:

• If you know how to best optimize web applications and backend databases, you can make your own instance more performant than others who may not have that knowledge. Case in point, I’ve seen various complaints on Lemmy about performance degradation due to an influx of users from Reddit in the past week or so, but I’ve been completely unaffected.
• Even if other instances are down, but yours is up, and you are pulling content/federating to the others, you’ll have the latest content from those instances cached on your own, so you’ll still be able to browse whatever you’re subscribed to on those offline instances for the time being (for those who use those instances directly, they’re out of luck).
• You own your own content. Updating content on your own instance results in a push to the other instances to bring them in sync. So let’s say you want to delete all of your post history or modify all of your past content to garbage. You can almost completely guarantee that no one can stop you from doing that, since doing so on your own instance will propagate those changes to all of the others it’s aware of where you’ve posted, as long as those instances are still online and reachable. And no one can pull the rug out from under you and make your account, complete with post and comment history from some point in time, inaccessible to yourself (removing this ability to secure your privacy and ownership of your own data).
• Load balancing (kind of but not really). Hosting your own instance takes some load off of other instances. Those instances are still bearing load when you push content to them, but it’s a smaller set of operations than doing everything directly on those instances as opposed to performing a sync. This results in overall better health for the Fediverse as a whole.
• More open access to the Fediverse in general. You’re not likely to have your own small instance blocked on any other instances, you “fly under the radar” so to speak. I’m unaffected by the Beehaw federation decisions as of late, for example, since my instance isn’t blocked anywhere and likely never would be. I’m too small of a fish in too big of a sea to bother with.

There’s even more reasons I’m sure, but those are the obvious ones that come to my mind.