That works, so long as you've refactored your infra to the point that the computational resources (whether server nodes or hard disks or or database shards) are modular enough that you can just add more stuff and it will play nice with everything else. That objective -- not a cute UI that lets you change one of the numbers -- is the hard part.
And yes, it is to Coinbase's discredit that they haven't done so, but (assuming you're not joking), they could very well not be at that stage. It's typical for startups to have technical debt like that.
Most scalable systems have some 'singletons' somewhere in the stack. At a certain scaling point, the singletons must be made scalable to multiple instances, which often entails making a new singleton to manage these instances.
In this way, scaling often gives you an order of magnitude or two of available additional capacity, but periodically requires new dev work to support further increases.
If that were the case it would be withdrawals that were temporarily disabled. There aren't any on-chain transactions made when you buy/sell on Coinbase, only when you deposit/withdraw.
Cold wallets don't scale, and that's the entire point of them.
"Hot Wallets" can be hacked, because they're connected to the whole system. "Cold Wallets" are offline, and require human intervention to transfer money into and/or out of.
Figuring how much money to keep in the "Hot Wallet" is a tradeoff in services, convenience, and security.
It's what happens when some businesses fail to act fast enough and use their loads of money to buy actual expertise. They had four outages in June. That's plenty of warning.
