In Germany, Fritz!Box actually managed to have advanced capabilities like that and still become mainstream. Many people use Fritz!Box routers here, and ISPs often offer them for free with higher contracts. I don’t have one, but my parents do and while I can probably do a bit more with my Ubiquity devices, it’s not that much more and the Fritxbox has a far superior user interface in exchange.

https://en.wikipedia.org/wiki/Fritz!Box

After reading /r/sysadmin for years I have zero faith in the average user's ability to use such a device. The closest thing I have ever seen was some D-Link router that had the option for a DMZ

Of course, but I'd also argue that smart home appliances are mainly for those with some technical knowledge, especially configuring them to work together. It's actually no linger uncommon to find networking gear with these features, only that most people just use what their ISP gives them.

It's a matter of defaults - isp provided firewall/routers these days commonly come with a guest WiFi mode, and good ones even segregate that network. I can envision an iot mode that would a large minority of users could use. There's always going to be users who don't care, or don't have the technical knowledge, but recognise that stories on /r/sysadmin skew away from the "average user".

That does not really resolve the problem for cloud encumbered devices

Sure I can block them from the internet but if their management requires a cloud server (which many do) then they are bricks

It isn’t exactly home networking, but Ubiquiti’s stuff has good VLAN and firewall capabilities.