I'd have more confidence in it if it could self-host and I was able to see gitea inside of a gitea instance and that was the main workflow. Like this, it feels like maintainers aren't prepared to eat their own dog food just yet. That's fine, but I'll take a pass until that's fixed.
So for small projects I wouldn't let this put you off, and for larger ones or those where for some other reason you want more than just good source control take a judgement based on the features you expect to need.
Of course it is git in the back-end, so if you start needing just an interface onto source control but later desire missing features that gitlab/github/other has, migrating the repositories should be almost no effort.
I'm hosting Gitea (together with around 10 other services) on a 1/1 instance (1 CPU, 1 GB RAM) at Hetzner. Those can be had for € 2,50 per month.
> its easier to have contributions on GitHub since it doesn't require most people to register a new account
That's the big issue.
The UI is somewhat slower though, code highlightning show up a second after page render.
But can the Gitea devs scale it to support potential growth that costs beyond $10 a month? This is the reality too.
> That's the big issue.
I don't think so: Github can work as OAuth provider, Gitea supports OAuth integration, so the self-hosted instance can still authenticate people using their Github accounts.
Sorry but that's dumb. Go offer them a decent free server and paid hosting and i'm sure they'll accept your offer.
Your example is not well-worded; it's a demand. I'd expect a well-worded issue to share some story about how you were working to achieve some goal, so you tried setting up gitea to self-host the gitea repo, and were surprised that it didn't work (and share the errors etc. that you saw). Then the devss can prioritise your issue by understanding how blocked you are by the missing behaviour, and even propose a workaround or alternative way of achieving your goal.
'Title: do this thing' is not polite or well-worded.
"Let's self-host gitea so potential users can easily see how awesome it is" is more polite, far easier to see the benefit of, and a trash-fire of proper composition.