It's a legal problem (granted, you could still call that both a scaling problem and a cost problem), not a technical nor infrastructural one. That's where Quad9 has specific experience with public hosting that Mullvad doesn't.

I'm sure that the time, effort, money, and exposure that goes into responding and adhering to legal requests for a publicly offered service is something Mullvad wasn't expecting and would rather not be doing considering it's not their core focus.

What is intrinsic difficulty? A product at scale has many intrinsic dimensions, not just technical. Saying scaling is not an intrinsic difficulty is pretty weird given a highly scalable product usually looks nothing like their 1-user counterpart even when they have the same functionality.