The "small model with unique custom domain knowledge" approach has a very low capability ceiling.

Model intelligence is, in many ways, a function of model size. A small model tuned for a given domain is still crippled by being small.

Some things don't benefit from general intelligence much. Sometimes a dumb narrow specialist really is all you need for your tasks. But building that small specialized model isn't easy or cheap.

Engineering isn't free, models tend to grow obsolete as the price/capability frontier advances, and AI specialists are less of a commodity than AI inference is. I'm inclined to bet against approaches like this on a principle.