Let me introduce you to Minecraft.
I have it, i played it for like 3 weeks at the beginning of November 2018
in the last week of that November i got Elite and i'm playing it since
sort of irrelevant tho
It sold 40 million copies. It sells millions of copies every year.
Lol, no!!!
Minecraft had sold 238 million copies as of April 2021, according to Microsoft, though its sales total has certainly climbed higher in the year-plus since. The company notes that figure captures the sales total across its 22 available platforms.
So it sold 238 MILLIONS copies, but not because it allows private servers.

And at those sales, MS doesnt really care if 200 more millions are pirated...
But let's not compare one of the most successful games ever released to a niche game like Elite which FDev seems to be struggling to keep it afloat lately.
The budgetary reductions are really visible lately, the list of bugs is growing with each addition to the game - lol, even the caustic launcher is plagued by 2 bugs
Updates reduced from 4 last year to maybe 2 this year.
Narrative is slowing down - only 3 Galnet Articles per week instead of 5 last year
CM Team involvement is reducing - they are very busy but not with Elite.
And so on and so forth...
And no, giving away for free part of their revenue (private servers and mods aka arx mods) wont make Elite more popular.
Not when they rely on selling Commanders AND paintjobs for each Commander sold.