while redundancy is good to have, it can easily be done in a way that does not compromise local functionality, e.g., a simple implementation is what netgear recently did with cloud services to manage their newer routers. Likely very few people use it because it is not as convenient as simply heading to the local router page, but it is an option for users and they give up no local functionality to get it, and if they kill that service, it will likely have no impact on the users as they can still access all of the options locally (and also remotely if they enable remote management, or use a VPN).
I would consider that a good implementation of cloud services, as basic users can use it without having to worry about a dynamic DNS, but nothing is given up, it is simply tacked onto what is already in place.
If the cloud were implemented like this with a product like dropcam, you would be able to head to the camera's local IP just like with any other IP camera, and view a live stream from it, or have a program such as zoneminder or sighthound, record footage locally, or have the camera automatically dump its footage to a NAS, with the addition of their current cloud services tacked on for the user to use if they want a simply way to remotely access the camera.
Even for users who lack the skills to manually configure their own servers, there are ways of simplifying the process, for example, setting up an openvpn server. There are a ton of steps involved (much of which is in a guide that tells you the commands to run. for a user who just wants to input a little bit of info ad simply have it all just work, one would think, if they can list all of these steps in a guide, why can't they just automate it?
well there are people who did just that, e.g., untangle turns that lengthy setup process into a 3-4 step process, as part of a wizard, and everything else is handled automatically while it generates a preconfigured installer.
With the ability for many tasks to be automated, it is possible to even have completely new computer users, perform fairly complex home network setups.
At the moment for most cloud products (e.g., some smart home products, cameras, access points), the companies simply take what would be the GUI front end, and move it from being run on the device its self, to being run on a remote server, at which point the company does everything they can to prevent you from gaining any kind of local control. So at the cost of reliability and longevity of the product, the company now makes them self the gatekeeper of continued use of your product, at the drop of a hat they can they can decide to charge you for continued use of the product they already paid you for, or turn it into a brick.
An example of this on the software side, is the game Diablo 3, At part of DRM, they decided to shift part of the game onto remote servers, thus user experiences were made worst from frequent server issues, congestion, and a whole host of other issues, in addition to the fact that the servers will not be around forever. Once the company is done with the game, and decides to end of life it, or go out of business, then the game will cease to function.