Netherite isn't banned, but I would guess that most hermits don't want the grind if they lose it, and it has little defensive benefit. The only benefits are that it doesn't burn, and it is only on a rare occasion that it would end up in fire or lava, and that it has knockback resistance, little use on a server where people don't fight that often (tools and weapons do also have increased damage and mining speed, but it isn't a fighting server and resources can already be instamined). Diamonds also have more value because they are more common, thus make a better currency than a very rare item that is only used for gear.