Self-hosting doesn't sell. You and I can probably self-host but majority of the bloggers can't.
The fact that Medium exists (and Blogger, Tumblr, etc.) is a testament to the fact that most (99% of the users) don't want to or know how to self-host a blog.
Oh, I completely agree that market exists. Along with all the business models and data collection value that goes along with them, in order to make them sustainable.
But look where that's got us ;)
The tools/software just need to be very simple and easy (/foolproof, if such an app exists).
The fact that Medium exists (and Blogger, Tumblr, etc.) is a testament to the fact that most (99% of the users) don't want to or know how to self-host a blog.
They just need a place to write.