Sorry Eagle, I dont know why other server hosts dont support S1 - especially as S1 can now take advantage of the same grid sizes and is only limited by car and track selection.
As soon as the new system is ready we'll launch it again, the planned server model has two S1 servers in it so I hope you will get some good racing.
Because making the administrator pick either S1 or S2 mode is ridiculous. It should be determined at runtime and be changeable. Selecting S1 keeps the server in that mode and its a faff to then change to a non-S1 track. Since most people are inherently lazy, including myself, this means that by default almost all servers stay in S2 "mode".
I hope I'm not speaking out of turn here, but the goal is/was to make the difference between S1 and S2 hosts purely based on the combo of the moment. We're close to that, but no cigar quite yet. I *believe* Patch Y will bring this about, now. It had been a target for Patch X, but with all the work to get Patch X rock solid for 32/47, Scawen simply ran out of time.