You're taking it to a weird extreme of magic. There are reasons to run things locally and there are reasons for centralisation. Medical centres (at least on my area) often run on thin clients, because that's a better solution than having local technical staff in each village and town. This makes things like security controls easier to manage. It also makes things like backups a part of the contract rather than part of infrastructure you need to buy. On the other hand when the internet goes down, your results may not be available.

Look at tradeoffs. There are no magic solutions. Pretending that cloud services don't solve any problems is as bad as pretending they solve all.