We definitely need more private and decentralized internet. However, I'm not sure if blockchain is the right way. Blockchains create trust and allow consensus along with a large number of nodes. But they archive this by copying everything everywhere. Can you imagine, that every computer connected to the internet would also store everything on the internet? Even with technologies like sharding, this would be ridiculous. I think you should rather look to solutions based on onion routing (TOR). There's still a lot of work to be done to achieve good decentralization and good speed at the same time. Sybil attacks are also a big problem in these networks. If someone could solve these problems, it will be a true revolution in terms of privacy. But be aware of NSA/CIA/GHCQ/FSB and other agencies.
You do have a point there, mate. As blockchains store everything on every node, it would take up a lot of space on each user's computer. Thus, by storing every copy of each site on a node, would not be the most viable solution. I think that the only use case that the blockchain would have now would be to audit and prove the existence of data in an immutable ledger.
If it were to be applied to sites on the internet, that would be proving ownership of an specific site's domain, and other info. Still, I believe that if at some point in the future, the blockchain would be used to power the internet, it would make it virtually unstoppable, especially if it would have massive hashrate just like Bitcoin's to secure the network.
Those government agencies won't take long enough before they discover how to penetrate the blockchain, and put an end towards the above concept.
By the way, I've seen another great concept of decentralized internet called ZeroNet. It may not use a blockchain, but still it is very interesting as it uses P2P technology making websites remain on the network if at least a single peer is "seeding" it. Just my thoughts.
