The thing is that Photopea has been extremely obnoxious with giant colorful ads. They take a big portion of the right-side of the screen (anywhere between 1/4th and 1/6th depending on your screen resolution), stealing important real-estate for actual work.
The owner of Photopea also fights ad blockers harshly and he went as far as surreptitiously breaking some features on purpose when it detected that an adblocker was installed (of course with a fair share of false positives), and then showed later a popup telling the user that they lost their work because of the adblocker. I think he eventually backpedaled on this due to the massive backlash.
You can pay to remove the ads but it costs 60€/year. I think few people are willing to pay for that when they just use it 2-3 times a month.
Overall the developer made the friction so extreme that people will do anything to get rid of the DRM entirely and use self-hosted instances. I think Photopea’s days are counted, a community effort to rebuild a similar tool from the ground up will definitely become a thing. The only thing left to say will be farewell Photopea, you served us well.