As I understand it, in order to interface with a FH-encrypted software the data needs to be encrypted too. So every input needs to be sent to the mothership, encrypted there, downloaded, then computed locally, then the output is sent to the mothership, decrypted, then downloaded to present the results to the user -- which is no different than just doing the computation "in the cloud", which already is a thing. So I don't see how it brings anything new to the table.

Unless the key is kept locally, which would be hackable.

FHE operates under asymmetrical encryption and the one running the software needs the public key to perform the FHE operations on the data. The private key is known to the manufacturer (although there are some cool applications if no one knows the private key, provably) and is part of the logical circuit of the FHE so that it can decrypt and freshen it's state.

Maybe more applicable for something like DRM?

there is a pretty big difference between having to hack a local key for every user and a real data breach

Yes, exactly. FYI, I added the word "locally" to my parent comment above to make the meaning clearer.