I don't see why not - there are loads of other sites, let's say DDL (roms etc) and various self-hosted blogs that chug along for years at the expense to the owner.

With Lemmy, the main concern would be growing storage, but that's mostly solved by using something like B2 or Wasabi to store images, instead of the local server. B2 also recently changed their plans to make it free to download to a certain extent (prior to this, you had to pay for downloads) which makes this route even more viable.

I'm aware of lemmyworld and dbzer0 being very public about their donations, and lemmyml has been run by the devs years before we migrated. Lemmee's admin is extremely active in the fediverse so that's likely to stay too. We've only migrated from reddit in the past few months, so i'd say a lot of lessons have been learned in that time, as well as the viability/sustainability of running reasonably big instances.

A fair few have folded in that time too, some just disappearing out of the blue (vlemmy, lemmyuk, lemmyfilm) and others not able to manage the moderation as well as abusive users. I don't think any have folded from it being too expensive to run - but I could of course be wrong there.

Personally, my blog site costs about $200/yr to run out of pocket, and is quite manageable at around $16/mo - comparable to a multiple-screen HD netflix subscription maybe. For a moderately used lemmy instance maybe you'd be paying $600/yr - about $50/mo which is still reasonably manageable. If just two users donated $50, your out-of-pocket costs drop to around $40. If all your users donated $2, assuming 100 users, your out of pocket drops to around $34.

The last time I checked, the largest instance Lemmyworld costs over $1k/mo to run (this also includes sister site mastodonworld, which is on separate infra but managed by the same core admin team IIRC). As of today there is a 4 month donation buffer, but looking at the graph on OpenCollective at least it looks like the admin team may need to cover a few hundred $ out of pocket if the buffer runs out, as monthly recurring donations is lower than the infra expenses. There are occasionally some very generous donors so I think it's financially sustainable for the time being.

Overall I don't think there's anything to be worried about, this is the fediverse so you're free to have an identity on any instance and still interact with the various communities. It's not like Digg or Myspace where "when it's gone, it's gone".