First, network overlays are not easier to setup than VPNs. Installing and configuring a network overlay client on every device is much more work than setting up a single VPN tunnel for every network you want to access. Overlay networks are just easier to plan because there is no planning. But they're not easier to implement.

Second, and far more important, meshing all your devices into a single flat network is dangerous. There is a reason why networks are designed with isolation strategies. Introducing an overlay into your networks breaks down these barriers for you, but also for an attacker.

The only overlay network that has built in firewall capabilities is Nebula. When I started configuring its firewall rules I found myself just recreating my existing segmented networks, but in a much more obtuse way. Instead of configuring a central firewall, I was configuring firewall rules on each device.

After all my research, I'm still running the same segmented network I was running before my overlay experiments. But I would like to give some praise to both Nebula and Yggdrasil. IMHO, these are the two most existing projects coming out of this space right now.