Well you can do a lot with 640k…if you try. We have 16G in base machines and very few people know how to try anymore.

The world has moved on, that code-golf time is now spent on ad algorithms or whatever.

Escaping the constraint delivered a different future than anticipated.

Assuming improvements in LLMs follow a sigmoid curve, even if the cloud models are always slightly ahead in terms of raw performance it won't make much of a difference to most people, most of the time.

The local models have their own advantages (privacy, no -as-a-service model) that, for many people and orgs, will offset a small performance advantage. And, of course, you can always fall back on the cloud models should you hit something particularly chewy.

(All IMO - we're all just guessing. For example, good marketing or an as-yet-undiscovered network effect of cloud LLMs might distort this landscape).