I think the killer app for FHE is an Ethereum-esque Globally distributed VM (yes eye-roll I hate Crypto/Blockchain nonsense as well). To me that was always the big interesting concept behind Ethereum, running some sort of code with persistent state. Obviously no free lunches so we gotta pay for that somehow to incentivize people to pay for power on computing equipment they aren't personally utilizing. But somehow "crypto" got caught on the literally first example of a distributed systems correctness: debit/credit of synchronized accounts.

I feel FHE combined with slightly cheaper cost might enable things like community run server-less apps that have user state stored and processed by untrusted nodes with persistent state stored and accessible only by the data-owner. E.g. a simple excel-esque web app which only serves the UI while State and calculations are running on this hypothetical system at no cost to the apps creator with me paying only for exclusively my usage. They provide the code but no one but me can extract my data and the results of any computations, and for the privilege I pay the system.

I miss the days of upload and forget software that just relies on client resources and so require little upfront investment from developers, I feel FHE plus distributed computing could enable this.

I am aware "Web3" claims to want this future as a concept but the cost and utter lack of confidentiality (I can observe all data to and from a contract as well as the sender/receivers identity) makes it a super-niche borderline useless VM. For distributed governance sure, it's a public ballot box (the preface to the first distributed systems example, a single account with credits), but for any application/user data absolutely unacceptable.