In my humble opinion, both strategies are promising and I do not see any reason why products of different price categories cannot coexist. I would rather say to make the whole idea behind roon popular there should be a hardware solution in any possible price range. Would even welcome more expensive servers than Nucleus Titan.
What is more important in my understanding is the perception of potential users that this product offers an ease-of-use ahead of competitors. The further we get away from the reputation of a nerd’s software being installable and usable only by a circle of experts, the better. Basically a roon system should not be more complicated to install than a Sonos or Apple or Amazon sound system and equally reliable.
Hardware-wise this might be the case but with the success of streaming services things might have changed a little bit. The real competitors in my eyes are Apple Music, Qobuz, Spotify and alike. If their apps become more sophisticated, competition would be tough for a software offering no content behind its frontend. The idea of curating a locally stored collection will anyways vanish so it is solely about the user experience and if I as a music lover are willing to invest a decent monthly amount in a tool which is helping me to explore music.