> VPNs do not allow you to connect two devices directly, they have to go through the VPN

Not true. Depends on the VPN protocol.

It sounds like the key difference people are missing is that VPN's operate at the network layer, so they require separate integrations for every device os/arch and network stack, where Iroh is embedded at the application layer, so any app can be a P2P VPN client without worrying about device network integrations.

Sounds great to me, and would be a boon for self-hosting and decentralization in general, which is sorely needed considering how captured, authoritarian, and anti civil liberties every democracy is becoming. If I'm not mistaken, I believe I read a tailscale blog about them envisioning application layer embedding at some point as well.