Your idea may work for technical systems used by technical users, but in this case (and I'd bet my bottom dollar most cases are similar) that the products are intended for non-technical end users.
How is some random family supposed to take the public repository of source code and set it up so their child's emotional support robot works? How is your middle-aged neighbour supposed to set up their Nest doorbell with someone else's server and establish trust? How is your aunt supposed to set their Alexa speaker to a self-hosted server? These are people who call a desktop computer a 'CPU'. Put yourself in their shoes, their IT skills are basically 0. Where would they host the compiled code? How would they even know where to start?
The intention is certainly good and it would be an improvement, but it would not allow consumers - most of whom are buying an appliance - to continue using their products. Would it really also push investors and managers to pause? It's a non-monetary impact and I can't imagine they'd allocate any effort building systems that package it up so that it's simple to stand up the cloud services. It has no benefit to them.
Most consumers aren't hackers/developers. Most are non-technical. Implicit in the purchase of a cloud-connected appliance is an expectation that some geeks somewhere make everything Just Work for them. They're not looking to have to tweak (digital) knobs and configure parameters - that's the company's job. That's why so many of these sorts of devices are designed with very simple user interfaces.
Your suggestion is good within the narrow window of technical systems for technical consumers, but this is a far tougher nut to crack than that when considering the broader audience.