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But it can never be truly peer-to-peer or decentralized due to the economics of last-mile connectivity. Connecting machines in a neighborhood is more expensive and difficult from an infrastructure perspective than hooking up a computer in a server farm.

This in of itself changes the costs and expectations of the parties involved which means things will likely slump back to a permutation of this status quo even with a different standard.

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Only if you assume high bandwidth cost. If it's more convenient to do something at home, it is cost-dependent whether people opt for the more cumbersome but cheaper centralised solution.

The current last-mile problem is that there is not enough demand for high-bandwidth applications to justify rapid improvement (we'd all have 10 gig connections by now if the 2000's trend had continued).

This comment show a big misunderstanding about the nature o the internet. The internet is dumb decentralized network with the intelligence placed in the periphery.

The server farm is part of the periphery of the network and has a last mile connectivity same a residential home connection. It is really expensive and only makes senses if you stockpile machines to have economies of scale.

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