The subsidy question is interesting, but in Germany these balcony panels are ~ €600 unsubsidized (depending on the exact kit; see my numbers elsewhere in this discussion) and still pay back in 5 years. The economics work with and/or without government help.
The fact the economics of DIY make sense, is the evidence of the market/state failure. (whether they really do make sense without fanciful efficiency calculations, I leave to you).
I think you need to make some better arguments to convince. Your argument only makes sense when wholesale cost of solar panels is significantly cheaper than retail. The better the economics of scale (i.e the smaller the difference between wholesale and retail) the more favourable "DYI" becomes, because the person had home does not need to cover the overheads that are necessary for large scale installations (financing, management, transmission, planning...). It's the same reason that hiring a vps to run all your compute is not necessarily cheaper than buying your own pc.
It makes sense for two reasons: firstly there's limited economies of scale in solar panels: they more or less make the same amount of energy per unit area and per dollar regardless of the size of the installation (rooftop is usually more expensive for installation but these systems have near zero installation cost). Secondly, because the generation is local you're not paying for any margin, co-ordination costs, or transmission costs. This secondary effect is already enough to offset the increased cost of rooftop installation in many cases.
(And maybe you can consider this a market failure, in that it doesn't fit some naïve idea of an efficient market, but you're always going to be paying for someone to make and take on the risk of the big, centralised version of things)
