There are two pieces missing from what you describe: one is ease of deployment, and within that I can lump operating costs. This is the less difficult problem to overcome.
The second, much more important problem: discovery. This is the only user-focused service Twitter actually provides (the ability to find the accounts you want to follow). The 'network effects' people love to throw out as excuses for using shitty services like Facebook is not as big a deal as people around here pretend. Email works just fine and there's no 'network effect' preventing me from running my own mail server. Discovery is so important that just about everyone reading this post would rather have a lock on discovery (and the accordant ad revenue) than promote any kind of federated system. Discovery is search, and search is hard, and searching across a federated service is damn-near impossible, which is why there's no email whitepages any more. Much simpler (and more profitable) to hash everyone's email addresses, or let them pick a cute username -- whatever, so long as you hold the keys and can sell ad space on the results pages.
Nothing like what you're describing is possible any more. There are no more federated open standards; the IETF is merely propped up to rubberstamp whatever Google or Microsoft wants to do next.
Well, it's the same reason have both chose to write our comments here instead of self-hosting it on our blogs, I suppose.
I would like to add the spam problem to your explanation. A distributed system needs a distributed solution for spam, which is much harder.
But we also need to add a little complexity to the description. There is a difference between decentralized and distributed systems, with email the former and usenet or irc the latter.
Both discoverability and search are trivial with distributed systems, but also offers the possibility of competing networks. It is interesting to note that the open protocols actually faired worse in those cases, as it lends itself to competititon, and a someone with access to deep pockets can leverage that against you.
The second, much more important problem: discovery. This is the only user-focused service Twitter actually provides (the ability to find the accounts you want to follow). The 'network effects' people love to throw out as excuses for using shitty services like Facebook is not as big a deal as people around here pretend. Email works just fine and there's no 'network effect' preventing me from running my own mail server. Discovery is so important that just about everyone reading this post would rather have a lock on discovery (and the accordant ad revenue) than promote any kind of federated system. Discovery is search, and search is hard, and searching across a federated service is damn-near impossible, which is why there's no email whitepages any more. Much simpler (and more profitable) to hash everyone's email addresses, or let them pick a cute username -- whatever, so long as you hold the keys and can sell ad space on the results pages.
Nothing like what you're describing is possible any more. There are no more federated open standards; the IETF is merely propped up to rubberstamp whatever Google or Microsoft wants to do next.