I think locally-hosted models at the org level will definitely be somewhat popular, but you seem to be talking about decentralizing for people's personal, non-business use, and I just don't think that's going to happen to any real degree.

People who say they want local runs really mean it: they want local runs on hardware in their room, not on some decentralized system which, if it existed, would almost certainly just be a worse, less-reliable version of cloud hosting. I'm not saying nobody would use it, but it sounds a lot like things like IPFS, which have also completely failed to displace either cloud storage or buying a bunch of disks for your own private use.