I might not be reading this correctly, but in the absurd extreme, you can keep extending this argument farther and farther out beyond a single machine to a LAN

I might not be reading this correctly, but in the absurd extreme, you can keep extending this argument farther and farther out beyond a single machine to a LAN and onto the wider internet. In that version of the argument, all the nodes on the internet need to have the global view of network state on every other node. The controlling principle behind almost all congestion control algorithms is that a single node can derive the properties of the path between itself and the other end by using the state of the transfer visible only on that one node. Once you reject that principle, any algorithm you come up with will quickly become unscalable.