I don't think you're exactly wrong, but I think it is too narrow.
You're perfectly right that there is far too little tech literacy. Even with the example of my parents. But they're an example of someone who I think would especially benefit from this. Because they wouldn't get it out of their own desire, but because I their child would install it for them. Because I don't want to build and piece together everything. Because I'm used to the general tech support of them calling me up, and having to figure out literally everything on the fly because the only time I touch a Windows system is my yearly Christmas visit.
I've ran a NAS in their home before and the reason they stopped is because they got a new router and "it broke." Prior to that I was able to ssh into their network because I had a pi laying around.
But the problem you specify is not the problem you think it is. It is UI/UX. Many of these things can be set up automatically. The reason PGP is a disaster is because it's cumbersome to use. Google making it default and not having to think about it solved that. Signal, iMessage, and WhatsApp made encryption trivial for people who wouldn't have done it before because "it is too hard." I'm unconvinced this is anything different. Where if you take a family member only basically tech literate, can help them do the initial setup, and away you go. You just have to make it as easy as WhatsApp (or even a lot less), and I believe you could.
I say this as someone who is a researcher and does a lot of backend programming. I know we give UI/UX people a lot of shit (and quite often they do deserve it. There are a lot of annoying useless changes), but they do also play a huge role in making technology accessible. Really, that is their main role. And truth be told, the environment has dramatically changed where now a days there's many custom distros that make things easier and even these days my Grandma can use Linux. There's definitely a hardware and backend problem here, but I'm actually convinced the biggest issue is design. Which, let's be real, is what made computers prolific in the first place.