> small models can never match bigger models, the bigger models just know more and are smarter.
They don't need to match bigger models, though. They just need to be good enough for a specific task!
This is more obvious when you look at the things language models are best at, like translation. You just don't need a super huge model for translation, and in fact you might sometimes prefer a smaller one because being able to do something in real-time, or being able to run on a mobile device, is more important than marginal accuracy gains for some applications.
I'll also say that due to the hallucination problem, beyond whatever knowledge is required for being more or less coherent and "knowing" what to write in web search queries, I'm not sure I find more "knowledgeable" LLMs very valuable. Even with proprietary SOTA models hosted on someone else's cloud hardware, I basically never want an LLM to answer "off the dome"; IME it's almost always wrong! (Maybe this is less true for others whose work focuses on the absolute most popular libraries and languages, idk.) And if an LLM I use is always going to be consulting documentation at runtime, maybe that knowledge difference isn't quite so vital— summarization is one of those things that seems much, much easier for language models than writing code or "reasoning".
All of that is to say:
Sure, bigger is better! But for some tasks, my needs are still below the ceiling of the capabilities of a smaller model, and that's where I'm focusing on local usage. For now that's mostly language-focused tasks entirely apart from coding (translation, transcription, TTS, maybe summarization). It may also include simple coding tasks today (e.g., fancy auto-complete, "ghost-text" style). I think it's reasonable to hope that it will eventually include more substantial programming tasks— even if larger models are still preferable for more sophisticated tasks (like "vibe coding", maybe).
If I end up having a lot of fun, in a year or two I'll probably try to put together a machine that can indeed run larger models. :)