No client can be trusted to arbitrate. If the instance host is able to unilaterally dictate the outcome of any encounter it would be exploitable. All clients need to agree on the events, if one is disconnected they clearly cannot agree on what happened after the disconnect.
That's not true in the slightest - a client can be just as trustworthy as a server. Trust does not depend upon whether a machine is a client or a server, but on how the system is set up.