> ...all of these server applications would have to be easy-as-an-iphone to set up and administer. Right now, such apps don't exist, because there's no market for them. But if the market were there, millions of people with hosted servers just sitting around, you can imagine how quickly they'd get made.

I don't know about this. People have phones and computers, too, but we still have gmail instead of personal mail servers, and we still have reddit instead of usenet. As a developer I definitely prefer serving web pages to shipping iphone apps (never mind physical CDs) because the deployment and maintenance stories are so much simpler. In other words, even if millions of personal servers existed already, why would a developer prefer to write Self-Hosted!Instagram instead of just Instagram?