I don't think this would solve the problem like you hope. Case in point, Netflix has this setup already for streaming video. Tons of small racks all over the world. It's a huge pain to maintain and was only worth it because of the huge difference in customer experience.

And even though they already have it, they still use AWS for all the control plane work, because it's just so much easier administratively. Admining distributed systems in just a few datacenters is hard enough. Doing it across thousands would be many orders of magnitude worse.

Heck, most companies can't even handle two datacenters.