There needs to be incentives for people other than the distributed system users to participate as hosts. Risks also need a way to be offloaded cheaply by the hosts.

Risks: Co-mingling your home's ISP with the basement rack seems like a surefire way to get your personal devices blocked if external basement rack users are running a VPN through it and doing heinous stuff. Annoying, maybe solvable with an ISP device reboot. But that particular risk is worse depending on whether the host's jurisdiction allows the assumption of identity based on IP. Risks around general liability. Risks around tax implications when internal revenue folks see the opportunity to collect capital gains tax on your income generating property. So many risks!

The only encounters I've had with companies trying to incentivize this type of setup are Storj and Sia - both pay their host operators in cryptocurrency, which is just another risk IMO. Despite my own involvement with Storj, generating enough income to offset my energy bill by about 25% monthly, the implementation that wins out and gains wide traction has a lot of groundwork to lay for those utility contracts, risks, and incentives.