Sure, large companies can easily run a on-premise coordination server. But large companies usually also have a network department and several other SDN and VPN solutions already. They are probably using highly tuned and standardized ipsec tunnels with hw accelerated AES encryption and special devices from different vendors.

I think tailscale could become the #1 solution for personal users and small / mid-sized companies (some of them might not even have an IT dept). At least the easy installation, the single process design (no separate IKE service etc.) and the opinionated modern cryptography - that deliberately does not allow any configuration at all - would make it a really good candidate for those use cases.

This users can probably rent a cheap $3 VPS easily and use it as an on-prem coordination server. However, this increases the installation effort considerable and trusting the cheap $3 VPS to be an essential part of your cooperate network might be a deal breaker. Many of those users might not even have a dedicated team for server maintenance and might not apply security updates regularly.

So, please add an (optional) additional PSK (or key pair / certificate) to each node that is not shared with the coordination server and can be used to sign / verify the configuration on each client. Users that do not care don't have to specify anything (they just have to log-in and everything works). Users that do care would have to login and provide the PSK on each device.

(And to be clear, the problem is not that I do not trust you. I am sure you are doing a great job and I would really like to use your service. But you are an US based company and with the new data protection laws within the EU it might not be easy to convince all customers that potentially sending all their data to a third-party company within the US is necessary.)

Are large companies your target market?