It's not nearly like that, it's designed that you can build your own, separate networks, before the concept of internet providers even existed (and a few colleges and DoD were the only users). It is completely decentralized (with the exception of DNS, which can be decentralized easily, but isn't).
Setting up networks is easy and cheap. the expensive part is pulling cables and connecting people, that's why many countries have the local governments do that. If you live in an apartment building, you can easily create a separate network for all the apartments. If you want to connect to the next building, you'll need a lot more cables and someone to actually dig in the cable or erect the poles and use those to carry the cable... but who will pay for that? What if you want to connect to the next city over... who will pay for the cabling, digging etc? And of course, the paperwork? Underseas cable? Good luck with that.
It's not a protocol problem, it's a cost problem.