How exactly are “communities offering services” a different thing than “hosted software”?
I think what they're saying is that the ideal wouldn't be to force everyone to host their own, but rather for the people who want to run stuff to offer them to their friends and family.
Kinda like how your mechanic neighbor sometimes helps you do shit on your car: one person shares a skill they have, and the other person also benefits. And then later your neighbor will ask you to babysit their kids, and shit.
Basically: a very very goofy way of saying "Hey! Do nice things for your friends and family, because that's kinda how life used to work."
They're also subject to interpretation, regulatory capture, as well as just plain being ignored when it's sufficiently convenient for the regulators to do so.
"There ought to be a law!" is nice, but it's not a solution when there's a good couple of centuries of modern regulatory frameworks having had existed, and a couple centuries of endless examples of where absolutely none of it matters when sufficient money and power is in play.
Like, for example, the GDPR: it made a lot of shit illegal under penalty of company-breaking penalties.
So uh, nobody in the EU has had their personal data misused since it was passed? And all the big data brokers that are violating it have been fined out of business?
And this is, of course, ignoring the itty bitty little fact that you have to be aware of the misuse of the data: if some dude does some shady shit quietly, then well, nobody knows it happened to even bring action?