One thing noone's mentioned so far is that if the norm in a setting is that songs are sung with musical accompaniment, lots of people are effectively excluded from contributing. It means that you have the room divided into performers and listeners - and this isn't on the basis that some people don't have songs they want to sing, but because they don't have instruments they can play.
What a terrible waste. Just think of all the great traditional singers who couldn't play a musical instrument to save their lives, or who prefer to sing without accompaniment. And if you have experience of song circles where unaccompanied singing is customary, think of the great singers who'd be silent if accompanied singing was required.