If you want to run AI models at scale and with reasonably quick response, there's not many alternatives to datacenter hardware. Consumer hardware is great for repurposing existing "free" compute (including gaming PCs, pro workstations etc. at the higher end) and for basic insurance against rug pulls from the big AI vendors, but increased scale will probably still bring very real benefits.
Currently, yes. But I don't find it hard to imagine that in a while we could get reasonably light open models with a level of reasoning similar to current opus, for instance. In such a scenario how many people would opt to pay for a way more expensive cloud subscription? Especially since lots of people are already not that interested in paying for frontier models nowadays where it makes sense. Unless keep on getting a constant, never ending stream of improvements we're basically bound to get to a point where unless you really need it you are ok with the basic, cheaper local alternative you don't have to pay for monthly.