That is, until a given SaaS becomes too greedy and someone identifies the core features people actually use, then spends a few weeks replicating them internally.

I think AI familiarity still varies a lot across companies and individuals. Small companies/startups often move much faster than large corporations, so that may also explain what you're seeing. Long before LLMs I worked at places where even monitoring solutions were implemented in-house because the vendors' pricing was extremely greedy.

My point is that I'm sure this will also change for some large corporations in the short to medium term. Not saying SaaS is doomed because it's obviously not and at the end of the day you want a battle-tested solution, but it does feel like the market will shrink.