Local-first / desktop apps were really easy back in early 2000's and before since users pretty much only had a single device.
Today, users have many devices with many different storage and compute constraints. They also expect their data to be available on all devices and, to top it off, be able to invite outside collaborators.
Handling this heterogenous landscape of devices and collaboration is much simpler in a cloud model. Trying to put more data and compute locally suddenly means worrying about a multitude of device profiles and multi-way sync.