It could be both. Perhaps Apple concluded that 1) they're subpar with cloud services and will have difficulty competing, 2) there's a growing need/demand for more privacy and less 'cloud', and 3) Apple's products are already, on the whole, recommended when it comes to privacy.
And based on that they figured privacy was a good thing to aim for. Play to their strengths and differentiate based on that.
Facebook has Cafe2Go. Apple is working on this (and already has bindings optimized to use the ARM vector unit for DNN evaluation).
Running on device, if it can be done with reasonable power, is a win for everyone. Better privacy, better latency, and more robust operation in the face of intermittent connectivity.
