In my opinion, Hive could be operated now entirely off home-based nodes (except for the issue of decentralized hosting of images and video, but work is being done here).

Traffic can easily be distributed across multiple API nodes using "hive availability" software such as haxproy and this software can also detect when individual API nodes are failing and can't respond to traffic. This is free software we use now to distribute the traffic of api.hive.blog across multiple internal nodes (we don't do this for performance reasons, but for redundancy, and to make it easier for us to do upgrades without resulting in an outage during the upgrade time).

Not every home-based API node would have the network bandwidth to run an haproxy node in this setup, but I'm certain that many internet offerings here in the US, and most of the western world, can support a node with the necessary bandwidth. Anyone running such an haproxy node in this scenario would also need to make sure they have an "unlimited data plan" to avoid excessive fees by their ISP.