Search the forums for the full thread, but the tldr is you can't have a non-instanced massive world while having the complexity of the combat mechanics in naval action, x1000 or 2000 times for each player on the ocean at any given point at any given time. For example, every ball tracked, manual sails, you name it. If you were happy with a point and click game with no depth then sure, it could be done. Also remember that the open sea is compressed so it doesn't take you days or weeks to move around, so having battles take place in slower time with ships in the area travelling at compressed speeds would look odd don't you think.And before you discuss shards or other instance variations please remember you said 'it's not open world if it has instances.'
It's been discussed ad nauseum in other threads but the fact that battles will be instances remains and it is going to be that way. It just technically isn't feasible between the team size, technical limitations, engine limitations, you name it.
I'd ask you to refrain from making uninformed statements like "can't afford good servers" when that has nothing to do with the situation. There's a reason there are no truely open world games without some hidden instances or tiny maps or being single player. This is 16 million sq km with thousands of players. Not mine craft or skyrim or any other instanced sad excuse for 'open world' where you just happen to be surrounded by impassable mountains, but hey it's 'open' because you can roam around and then do instanced dungeons .