Some good thoughts on this. I know that my smaller companies definitely weren't going to shell out money to put certificates on their dev and test servers. At one company, they didn't even shell out money for actual servers for some time - we had a rack full of old desktops that were labeled "app server 1", "sql server", etc. They did eventually get an actual set of blade servers for dev/test, but that was always amusing to open the door to that and be greeted by a set of old desktops.
I haven't tried LetsEncrypt for SQL Server certificates. It seems like it should work and that, coupled with the dbatools modules for certificates could be quite useful for those dev/test instances where you can talk to the CA for LetsEncrypt. I know you'd need to be careful with those to make sure you refresh the certificates regularly to keep them from expiring. I've tried to use LE in the past for various purposes and seemed to always run into small issues for things outside of websites - Terminal Services, SQL, etc. It's probably worth trying again.