An application that is hosted separate from its data will by the nature of the network have much higher latency and lower bandwidth access to the data.

This limits the user experiences such application can provide.

The right to cache data locally at the application host is a partial work around to this. In reality even the caching has high latency if you want to keep it coherent with other applications views of the same data. Locking the data to be owned by the application to avoid cache sync and verification latencies is effectively the same as not using your own data host in the first place as it essentially gives up having the data host be the master copy of the data.

I expect caching data locally with an application is likely just as expensive to boot strap as providing the data hosting yourself in the first place. caching = hosting.

Regardless, users being able to buy high quality data hosting with APIs such that applications external to the hosts can make great use of them sounds exciting. It leaves users with much more control over their data.