It works well if you can aggregate the distributed resources so they're large enough to bid at the wholesale level.
Still, the conclusion is like you said. There's basically no real-world scenario where it makes sense for a residential customer to go it alone, because they can make at most a couple hundred bucks a year. So makes sense for their device companies or someone else to figure it out with utility and pay thousands of homeowners to agree to participate. Ohmconnect has a cool service in California.
The real big thing is aggregating the aggregations. Distributed Energy Management Systems (DERMS) / Virtual Power Plant Management Systems are an active research topic.