Why instead of buying an island Elon bought Twitter’s debt

I think this question reveals something more interesting about misunderstanding wealth inequality. You are thinking of wealth as a finite resource that needs to be managed.

That's not the world that Elon lives in. Elon in effect has infinite wealth. He could buy an island and still have infinite wealth. He could buy Twitter and burn it down and still have infinite wealth. He could make 100 other people billionaires and still have infinite wealth. There's no "instead" when it comes to talking about infinite wealth.

I think a more interesting question is why as a society do we allow people to have infinite wealth?

I don't know about Elon, but: Why do rich people buy media businesses? very often, because they get power.