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You don't need a server. You need a COTS router running OpenWRT and OpenVPN (with hardware acceleration), a couple of well-placed antennas, and a commercial- (not carrier-) grade symmetric DSL, cable, or wireless connection.
In other words: You don't need a million spinning-disks server with its own abilities to serve content, you need a a million low-power NAPs with a gateway to your own content.
How much traffic does google.com see from my small Ohio town of ~45k citizens? Answer: Not enough to swamp a well-proportioned 802.11a link. Or a 45Mbps T3. Or a 75Mbps symmetric DOCSIS connection from TWC...all of which are cheaper than hosting actual servers
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You used Google.com as your example. I want to understand what you're suggesting. Are you saying that your router , which is "cheaper than actual servers" is going to serve Google.com search results? It's going hold and query the database of over 5 billion webpages, while doing all of the calculations to rank them for each search term people type in? That's pretty impressive for a little OpenWRT router. If you find a way to do that you'll get really, really rich because right now companies like Google spend hundreds of millions of dollars putting together racks and racks of equipment to be able to rank sort through billions of pages in under a second.
Perhaps that's not what you're saying. Perhaps you're suggesting that you and your neighbors could use wi-Fi or coax to connect to each other, then the neighborhood would be connected to the backbone as usual. I've seen something like that work with television. The neighborhood had one big antenna tower, then there was coax running to each house from the antenna. It was called Community Antenna TV, or catv. Today it's better known as "cable tv".
You see what happens is that in your neighborhood , one family has two Netflix streams running constantly every evening and another guy just wants to check his email. The neighborhood has a 100 Mbps backbone connection, so when a bunch of people try to watch Netflix and Youtube from 6:00 PM - 9:00PM, it gets bogged down. The people just checking their email don't want to pay $80 / month for the neighborhood to have a true gigabit backbone to the internet. Rather, they think the families with multiple Netflix streams should pay their fair share - since they are using ten times as much, they should pay most of the cost. So you end up having different people paying different rates to get different speeds, and someone has to manage all of that. You can hire a company to manage all that for you, making sure everyone is paying their share for the backbone, the shared equipment, line maintenance, etc. The companies who manage all that stuff for your neighborhood are called "ISPs".