A medium end gaming PC can display impressively realistic graphics at high resolutions and framerates while also being useful for a variety of other computationally intensive processing tasks like video encoding, compiling large code bases, etc. Or it can be used to host deeply mediocre local LLMs.
The actual frontier models from companies like Anthropic or OpenAI require vastly more expensive computing resources, resources that could otherwise be used for potentially more useful computation that isn't so inefficient. Think of all the computing power going into frontier models but applied to weather forecasting or cancer research or whatever.
Of course it's not either or, but as this article and similar ones point out, chips and other computing resources aren't infinite and AI for now at least has a seemingly insatiable appetite and enough dollars to starve other uses.