1. Everything being 'free' by default drives us to ad-supported centralized services. Economics aren't a separable concern.
2. Too few IP addresses. (At least one of the pioneers, I forget which, said he pushed for longer addresses but was overruled. So the technical constraints probably did not force this.)
I'm not sure how to fix #1, but here's an approach from the 90s: https://citeseerx.ist.psu.edu/viewdoc/summary?doi=10.1.1.16....
I hate this argument. I've been online for a long time and the internet existed just fine without, for example, facebook. We don't have to accept ads but we do have to be willing to not use certain things out there.
I know this is a holywar topic and many would disagree simply by seeing `blockchain` word used here. But to my mind this exactly the place where this technology is beneficial. We need automated algorithm controlled currency to have this type of smart internet subscription.
The problem of how to fund actual web application development is not much different from the problem of how to fund media development in general. Newspapers, television, and magazines alike long ago settled on some mix of premium-tier subscription services augmenting a more open, ad-funded free tier.
This is so much more of an issue today than 30 years ago not because of anything specifically about ads to fund media, but because ad profitably has been driven sky-high by individual consumer profiling that relies upon privacy invasion and surveillance of your customers. Ads back in the day would improve via voluntary focus groups and that was fine. Today, they improve by tracking every digital action a person ever takes in order to more accurately correlate interacting with an ad with making a future purchase. Volunteers for focus groups are pretty much okay with giving their opinions in return for cash. Every person on the planet is not nearly as okay with having every digital action they ever take recorded and analyzed.
This doesn't mean it'd kill advertising. It wouldn't even kill all of the forces encouraging me to put my 'content' on centralized services even though I'm nothing like a media corp. But I suspect the right changes could've helped a lot towards a healthier computational ecosystem now.
This early architectural decision that costs are out of band didn't fundamentally make anything impossible. But when you see a lower-level problem addressed by higher-level workarounds, and you're getting to redesign the system, isn't that exactly what constitutes an opportunity?
I also don't want to be nickle and dimed to death, given the transaction fees there's a huge push to subscriptions and other models. Where if I could instead just pay exactly what a generic ad I'd _never_ click on anyway pays to get placed (like 0.00001 dollars for all the ads on a webpage stuffed with them) I might actually pay instead of using adblock for all of the security, usability, and bandwidth saving reasons.
Quite frankly, if they didn't allocate full /24 to single entities (including localhost...), we might still have enough addresses left.
IPv4 is just inefficiently allocated in general. Why does the world need 10.0.0.0/8 in addition to 192.168.0.0/16? Isn't 65k addresses enough? Is there a private organization in need of 16 million addresses?
Not to mention AMPRNet (amateur radio) owned the entire 44.0.0.0/8 up until 2019 (a portion was sold off to Amazon). That may have seemed reasonable in 1980 but now it's just plain crazy.
Plenty of mobile phone networks have well over 16 million subscribers, and they typically don't have enough public IPv4 addresses for everyone. This has led to really hacky stuff, like using DOD IP ranges as psuedo-private space, or re-using private IP addresses in different regions (which can't be fun to maintain.)
Some networks have fixed the problem by using NAT64 - forgoing IPv4 altogether internally, and translating to public v4 at the edge. (Works surprisingly well, T-Mobile US has been doing it for the better part of a decade.)
This is why 192.168.0.0/16 is often used for services like libvirtd, kubernetes and docker. And the use of the range by those services makes it even more unwieldy to try and put some other LAN in there.
You can work around these considerations if you want, but many people won't. When you're the network engineer responsible for designing a company's networks, you'll be wanting to keep things simple and robust. When you're called in at 3am on a Sunday because the network is down, you better hope your ability to recover doesn't require making a bunch of subnet calculations because you decided to try and use the pool of available IP addresses efficiently.
For how long?
Even if we hadn't wasted /8s on huge allocations to single companies, and things like 240.0.0.0/4, we'd still be basically where we are today, with v4 address space being scarce and traded as a commodity.