I think there is a convergence in our views.
To work for our personal interests, and only us (i.e. no third party), we need to pay for the resources directly, whether its hardware or a cloud service. Whether we contribute to an open algorithm or pay others to work on the algorithm.
We can certainly provide our own hardware and innovation.
But most people don't want to manage these things themselves, they want a service.
Another reason for the cloud/provider solution, is that a lot of these services have functions that are amortizable across users: i.e. crawling, indexing, correlation analysis, etc., that precede making individual recommendations.
Either way, if people don't contribute in proportion to their demand for service quality, scale and innovation, the system is going to either die, or get subsidized by third parties who find the resources to be highly competitive by using us.