They are functionally equivalent for the player. The problem with player hosted servers is that it was very hard to get a fair and balanced competitive match, where now it's extremely common with matchmaking on servers hosted by the game company.
> The problem with player hosted servers is that it was very hard to get a fair and balanced competitive match
Playing against overwhelming odds has its own kind of charm. I once spend days just sabotaging the top players on some gun game servers, only wining myself once or twice. Games against friends with various fun handicaps and flat out abuse of any knowledge you could gain from playing against the same people repeatedly - what good is a hidding spot when everyone knows you will be there 50% of the time.
"Fair and balanced" games against completely random people are just missing something for me.
They are not functionally equivalent, unless there are games I'm not familiar with where custom lobbies are published in a list for strangers to join. Normally a custom lobby implies invite only.
Not everyone is interested in a "fair and balanced competitive match" where you're guaranteed to win no more and no less than 50% of the time. I actually find that intolerably boring.
Back then at least you could do something about it. Now if there's an obvious cheater you just kinda sit there and take your L, and ask people to make reports.