1. Encapsulate traffic on the way from your machine through the first few hops of your Internet connection.
2. Shield your identity from third parties trying to discover it, through technical or legal means.
3. Provide a bottomless pit for disposal of DMCA complaints and other nastygrams.
Your solution covers only purpose 1, which is becoming increasingly irrelevant as almost everything uses HTTPS, and DNS-over-HTTPS and Encrypted SNI is coming.
First of all, you missed one thing that is really one of my primary concerns. I hate the idea of my ISP working with other ad surveillance companies to track and sell MY data about mine and my family’s and friends’ online activities.
Having a VPN stops that part of the surveillance machinery from working as intended. Combining that with pihole and other tools allows me to disrupt (at least a little bit) the business of the internet that I hate so much.
Also, Tor and other tools (all part of the same solution above) address #2 to the degree I need it addressed. And I am currently not worried about #3, but with the decentralization of streaming services, it won’t be long now.