Th solution would be services that use encrypted S3 as a backend.

If services like immich, nextcloud, etc. were designed to have the bulk of the files on a 3rd party S3 compatible encrypted server (eg - only thumbnails and pointers to the encrypted database on the local server), then it would be much more practical to be able to use the big companies for private, safe, metered usage.

I envision the following: Some company offers a phone app which with one click will install your own "self-hosted" Immich or whatever. Immich (in this future version) relies on encrypted S3 files for hosting, and in the contract it says the host will not steal your encryption keys. Since this gives MUCH more control to the user, this service become popular and the hosting company grows (like. Whatsapp hockey stick growth). Soon, other hosting companies offering competing apps. (Hopefully, these apps continue to be developed, and agree on some interoperable standards between them.) Since the data storage is all on S3 you can easilly move from service to service or from S3 host to S3 host.

There is nothing conceptually difficult about such a future, and it would be worlds better than what we have now.