I hate it as well, mostly for the fact that people don't understand how Matrix is decentralized. They think "join matrix.org and create a space" as the same as "creating their own server".

Most of us do, I think. Then again, what would you label them as? A space? A domain?

there is an entire generation conditioned to call any group chat or instance a “server” and the pedant in me absolutely wants to scream every time I hear it

I believe the origin, however, was to help it clearly and directly compete with teamspeak or mumble at the time it launched. You would actually have to invest in some sort of hosted server for your group, so the name made sense as a way to help people visualize how discord worked. It’s definitely a relic at this point though.

Now you know how my dad feels about the terms "engineer" and "software architect" being used for software developers.