Oh no I get the context just fine. What you're missing is that "should be self-hosted" is outside the realm of the average business, and it's not realistic to put this as some arbitrary requirement to check the "privacy" box.

You're clearly a tech person so maybe it feels self-evident or easy for you to do that, just like taxes and law seem self-evident to accountants and lawyers, but the average business owner doesn't have time or money - or the skills - to figure all that out on their own, so they hire a service provider.

Do you think accountants and lawyers come to the business and work on their computers exclusively? No, they receive copies of the confidential business data and work on it within their own business environment.

And do you think accountants and lawyers don't include "privacy" in their pitch?

How is that different from analytics saying "we will keep any data you share with us private, and for your use only".

Based on your argument, as a business owner I should purchase and co-locate my own server, because even if I self-hosted my analytics, I'm storing that data on a third party server owned by my hosting provider!