Depends how many people you are hosting for. But what you describe seems overkill, I think Lemmy.ml just upgraded to a 6 core cpu and 32gb of ram and they have 30k+ members.

I run my own instance, the benefit is privacy and reliability. Everything is controlled on your own server. You also aren’t reliant on someone else running an instance that could go down at any time, either permanently or an outage. Been a problem with Lemmy.ml recently.

Lemmy instances seem to have trouble seeing content from kbin instances for some reason.

The political views of the main devs are controversial but it doesn’t really matter since Lemmy is free and open source. No one owns or runs it. Only lemmy.ml specifically is run by the devs.