It's worth making a distinction between running a server and managing it. People don't want the hassle of managing all the complexity of server infrastructure,

It's worth making a distinction between running a server and managing it. People don't want the hassle of managing all the complexity of server infrastructure, but they appreciate the benefits of owning your data, and the hardware it is stored on. It's just that right now the centralized solutions that store data centrally are the only ones available for web-scale applications. However, that doesn't have to be the case. If you look at consumer appliances and mobile computing, you can build managed environments that are physically distributed but partially or fully managed, with the actual code and data as close to the user as possible.