1) Someone uses it for nefarious purposes, everyone involved gets implicated and investigated (in no small part in an attempt to drive people away from this model), no one wants to use these things anymore.
2) It works reasonably well, becomes a business, and big business provides for a small fee (perhaps free except for watching ads and your location data....) those hotspots and decimate the critical mass needed for this into unusefulness. If you think that's far fetched, this has already happened: consider email - it used to be distributed. There is now a copy of ~90% of emails on a Google/Microsoft server because at least one of the senders/recipients uses a hosted account.
You can't really win an infrastructure game against established player using their own infrastructure; And the barrier to entry is so huge it's unlikely you'll be able to set up your own.
A friend of mine makes a very persuasive argument that Facebook has demonstrated how to manipulate vast numbers of people at mass scale - so much so that shutting Facebook down would no longer make any difference - now that it's known to be possible, it's much easier for anybody else to copy what's public and work out how to make the "private" algorithms work.
A long-ish read, but a lot of that argument is here: https://meanjin.com.au/essays/the-last-days-of-reality/ and here: https://ukvid.net/video/mark-pesce-on-the-end-of-reality-fPA...
Then you use them with a non-cellular equipped device (iPod Touch?) or perhaps trust airplane mode with Wi-Fi turned on - and use Signal/iMessage/Facetime/whatever...
I wonder how hard it'd be to route incoming calls to my phone (as in, the one with a SIM registered in my name) to a vpn-ed non-cellular device? You could probably make a very plausible looking "Gets up, goes to work, stops at a bar on the way home some days, gets back home, goes to sleep." routine while still being connected while you phone is on the desk at work of the coffee table at home. (or perhaps on the Roomba at home, so it still moves around a little...)