A server like KitPvP has very likely been optimized a lot, but there's a certain limit over which any upgrades you do don't actually help the server enough to be significant. If they increased the slots in KitPvP, it'd very likely lag the server out: take as example BadBoyHalo's server, that becomes unplayable when BadBoyHalo is streaming and Skeppy comes on. They likely decided to take some strain off KitPvP's server to make it less laggy and place it in the hub, where players don't do too much that lags the server and they can be distributed over multiple different servers. Hypixel's strategy of having multiple servers wouldn't work because KitPvP needs all the players in one place, while minigames can distribute them.