I don't think we will suddenly abandon the cloud. If anything, we will centralize even more information. My biggest philosophical debate is what will happen to people who deliberately protect their information. Surely they are meatier targets by various adversaries, but the thing that bugs me most is the fact that you will become irrelevant. Lack of data will impede even some most basic services and probably you won't be trusted because Big Cloud doesn't have your profile.
Is this sarcasm? I guess I fail to understand how Google now knowing all the details of my life impedes "progress". It shouldn't stop them from developing new technology; why does the "cloud" need to figure out how to "personalize" things more for me anyways, outside of the obvious answer to serve up better targeted ads (which I'd rather make go away by any means necessary)?
More of irony, I guess.
Google's core is still about serving you information and possibly some knowledge. To get better insights they need more information. It is as simple as that. MS entered the same field with Windows 10. They need more data to give better Cortana experience. If it's not all the data, Siri, Now & Cortana would suck. Now we are witnessing them going mainstream.
Secure smart home servers that act as rendezvous servers for your end-to-end encrypted connections so you have smooth links and network switching, routing, file hosting for your privately shared media (using tech like Tahoe-LAFS), anonymization (why run multiple Tor/I2P clients in a network when you can have one trusted device do it?), simple access control so you can easily determine to gets to connect to your home automation hardware, etc...