I don’t understand how you don’t see a problem in creating a bunch of external files to be used in the scene (something that can be done with linked instanced collections) but you have a problem creating instanced collections and use them linked?
BTW, I don’t understand why are you so aggressive about this, I’m not trying to turn a bug into a feature, instancing is broken, that’s clear, I’m just trying to explain how instanced collection behaves and how similar to vray or corona proxys they are, you don’t need to have 3 million collections, you can have a .blend with collections to be instanced and instead of having 1 file per type of object you can have 1 file with all the collections to be instanced and do the linked instances.
I’m not trying to attack you or to defend that “instancing is not broken”, instancing is broken right now and no one will argue that, but Instanced Collections work in a very similar way to Vray Proxys or Corona Proxys, and it was an answer to this:
“Even if it was, creating one collection per each object you need to instance would be such a bad workflow it would not even be a feasible workaround.”
If you think creating a file per object to be instanced is a bad workflow then you may think that Vray Proxys or Corona Proxys have a bad workflow, if you don’t think those proxys have a bad workflow, then you can have the exact same workflow with instanced collections, except instead of having the need to 20 files for 20 objects you just need 1 file with 20 collections to be instanced.
BTW Proxys are intended to improve display performance, and the first version of MR Proxys (I think Vray proxys too) were not able to display the proxy as a point cloud, they were able to show just the bounding box, exactly the same done with Bounds and instanced collections.
Could be cool to have a “point cloud” display type that could be cheaper in the viewport? YES! I wish we could have that, and maybe it’s easy for @fclem to implement something like this among the available options for viewport display.
But do the instanced collections accomplish the same target as proxys? yes, they do, they can improve viewport performance AND reduce memory footprint A LOT in render time.
Is a bad workflow to have the same collections you want to instance in the same scene where you want to instance them? I think so, that is why we organize our objects in a different .blend and link the instanced collections from there, having a similar workflo than Vray/Corona Proxys.
Can they be improved? Without a doubt, but we need overrides for this, for example to be able to offset the animation timeline for each instanced collection.
Are they the same as object instances? not at all.
Are object instances broken? Yes
Should they be fixed? No… well yes of course… I was just joking LOL!
Cheers.