Even if custom game servers were a preferable experience, which I would argue against, it doesn't really do anything for this problem.
By the time you have to wait for someone to cheat just to ban a single user, the disruption is already done. Your 4v4 45min game is already disrupted and everyone has already wasted their time now that you have to kick someone.
It's kind of like thinking you can forgo anti-bot measures because your website's users can just report the bots: by the time it's your users' problem, you've ruined the experience for everyone except the bots.
counterpoint: my 45 min 4v4 game gets terminally disrupted if I can't run the game on my device
> By the time you have to wait for someone to cheat just to ban a single user, the disruption is already done. Your 4v4 45min game is already disrupted and everyone has already wasted their time now that you have to kick someone.
The difference is there is usually an existing level of trust between people playing on a private server. Usually your group would know ahead of time if someone is going to potentially be a problem.
Furthermore, even with public dedicated servers, there's a psychological aspect to it - it's no longer just a random matchmaking server; you're almost walking into someone's house. Many people feel a lot more pressure not to misbehave
Then there's the fact that you don't have to wait many days for your cheating report to hopefully be acted on. Our game got interrupted? Well, that sucks, but we can just ban that guy and go again and we likely won't have to worry that our very next game will also contain a cheater
Finally: these defences always have an implicit assumption with it: that the horribly pervasive anti-cheats actually... you know, work. They do, to a rather limited extent, but cheaters are still rampant, so what's the point?
I would much rather my 45 minute game be disrupted and the user booted permanently by moderators VS every game be disrupted for months while the developers try and work out which parts of my privacy they can invade to maybe hopefully boot the cheaters.