Realistically, the best solution is hosted and managed versions of FOSS apps where the private data is encrypted. Most people just don’t want to manage a server, and this solution would provide funding to FOSS projects while also increasing data sovereignty for non-self hosters.
As much as we all might want it to, self hosting will never be mainstream.
I wonder what the market would be for such a solution. Make a custom raspberry pi like small server that has a self hosted website with a decent UI to setup most solutions like email, nas, pihole, and maybe a media server. Sell the easy setup to those who can’t be bothered, while still being open source and promoting Foss alternatives. I’m sure you could even sell different server tiers for power users as well who don’t want to be bothered with it. Then you could always sell a security service in a sense that will have people at the organization maintaining and updating the packages on the server os for that identified hardware. Then anyone who is inclined could set this up on their own so long as they have the skills to maintain their security, otherwise for basically the same cost as most subscriptions you could be able to self host email, Nas, media and an ad blocker network wide. As long as the ui experience setting this up is just as polished as simple as setting up a Gmail account I feel like this could do pretty well.
Think about how many people have a Synology NAS; it’s close to what you’re describing, but it’s still a relatively niche product. People simply don’t care enough. What you’re describing could definitely work, but only once people start caring about this.