Depends on whom you ask from. For me selfhosting is all about the software and renting hardware is a perfectly fine solution for that. You don’t need to worry about UPS’s, maintaining hardware and all the jazz which comes with your own gear. Sure, then you’re depending on your VPS provider that services actually stay up, but even a small VPS provider has more people working on things than just yourself. And they have power solutions, like industrial scale power solutions with generators, multiple connection points to the internet and things like that which are either impossible or very expensive to set up just for your own hardware.
And then there’s the other side, like home automation, where relying on internet connectivity to get your lights on is, in my opinion, a bit silly thing to do for yourself and running server for that locally makes perfect sense. So, right solution depends on your needs, but if you want to define what counts as self hosting in my opinion it boils down to who has the root/administrator credentials on your server. Other may have different opinions.
Not that it’s really relevant for the discussion, but yes. You can do that, with or without chroot.
That’s obviously not the point, but we’re already comparing oranges and apples with chroot and containers.