What about housing? Why do people still buy housing?

Two reasons: 1. For the investment in the land the house sits on (the house itself is a depreciating asset, but the land may be a good investment), and 2. For the ability to control their own destiny, to be able to make improvements and to have a place to live that does not rely on a landlord's willingness to continue signing leases with you. Note that #2 is totally analogous to owning your own server infrastructure. You definitely give up control when you rent rather than buy compute. But I think people are more sensitive to this in their personal lives than businesses (especially small businesses); after all, you're stuck with your personal life, you can't sell it or declare bankruptcy or just shut it down if things don't work out.

The list of things that I don't understand only seems to grow longer, so I'm not sure, sorry.