What makes it not more popular ? Is it the federated approach ? The client applications that don't look really fancy ?
At the time Matrix/Element had recently launched their Matrix 2.0 efforts and I tried setting up the whole stack without resorting to their all in one shell-script meant for non-production use. I did not mind hosting four different servers (Synapse, Matrix Auth Service (MAS), Call, etc), but did find the integration and config job a bit tedious. The main blocker though was the lack of an invite-system in the new Matrix Auth Server. Also the fact that the Element X app uses a new Livekit based call server while other clients/apps use a different approach is also something not great.
We ended up going for Mattermost. One service easily hosted with Docker. One app, and easy invites. While I think federation would be cool, right now Mattermost was a bit simpler to get up and running.
Element seems more focused on enterprise and government contracts than self-hosters. I think this is fine, they need to pay their bills. But Matrix 2.0 for self-hosters might need a better story right now.
I'm actually not sure how I would go about stopping AI crawlers that are reasonably well behaved considering they apparently don't identify themselves correctly and will ignore robots.txt.