All that will not fail, because there are strong forces that explicitly want this to happen.
But it's always nice to hear that there are at least problems...
So unless your personal homelab needs to be hyperscalar, you don't need a public cloud; your needs will be served perfectly by a $5/mo VPS/PaaS, and/or a LACK rack.
Do companies need sovereignty? No, companies need to make money, that's their primary and main reason to exist. The choice of public cloud vs dedicated servers vs colocation vs on-prem vs etc amounts to whatever best fits your operating model. The public cloud was overhyped (like everything in tech), but smart companies chose the right tool to do the job.
Historically, the main economic impetus for centralized government, is to coordinate the construction of irrigation infrastructure. The more dependent a society is on one big river (Ancient China/Egypt), the more centralized it becomes.