TBH I think it might've been a mistake from mastodons side to allow media hosting. Running ffmpeg in the background to transcode video, the image optimization scripts and the hosting of it all gets a bit costly.
I might be wrong on this, I don't run an instance myself, but in my perspective cost cutting should be prio number 1 even if it means you have to cut back on some features. Removing toot edits should allow for a more aggressive caching strategy etc.
This should allow more people to start their own instances without being afraid of potentially hitting it big.