A client/server architecture has technical and efficiency advantages as well, though. We host an AGPL v3 licensed SaaS application for our clients; they can switch to self-hosting at any time, so they're hardly captive, yet none has ever made the switch.
Yes, but the access to sources creates transparency and furthermore the lack of lock-in creates trust... Very much like in romantic relationships where freedom of choice actually strengthen the bonds. Users who feel locked-in will be planning an escape, however staggering the obstacles might be.
