I think everyone should go... At this point we have many measures to avoid spreading the infection. Sport is working, we have sport competitions so I think ESC could be organized similarly. Testing before and after and everyday, maybe mandatory quarantine for some days etc; like an Eurovision bubble. Also, it's not like nobody can travel, people who need to travel due to work or people who have important reason can still travel, airplanes fly... And Eurovision is important enough to let the performers travel and represent their country. So I could see people not going because government forbids, doesn't give permission etc (although I think it would be stupid, it's about representing your country in biggest TV show), but I wouldn't get if artists themselves give up on going (unless they're sick with covid)...
I don't know how it will impact the results, maybe for some it's better since to make a back-up performance they got 1 hour and they can use their own TV studio tricks, you maybe couldn't do at Ahoy, also there's less stress, because it's not live so the vocal performance could be better than it would be in Rotterdam (maybe for Montaigne it's better then, idk), but otherwise I think it mainly harms the act to not be able to go live, as interviews would probably be also via Zoom or prerecorded (we saw how it worked at Melfest with juries) and that might give a bad impression. It depends on quality of the prerecording I think.