Sure, but we're quickly approaching wireless distances where even a few people in a metro area can get a mesh network going.

Yeah:

The core principle of Tor, known as onion routing, was developed in the mid-1990s by United States Naval Research Laboratory employees, mathematician Paul Syverson, and computer scientists Michael G. Reed and David Goldschlag, to protect American intelligence communications online. Onion routing is implemented by means of encryption in the application layer of the communication protocol stack, nested like the layers of an onion. The alpha version of Tor, developed by Syverson and computer scientists Roger Dingledine and Nick Mathewson and then called The Onion Routing project (which was later given the acronym "Tor"), was launched on 20 September 2002. The first public release occurred a year later.

In 2004, the Naval Research Laboratory released the code for Tor under a free license, and the Electronic Frontier Foundation (EFF) began funding Dingledine and Mathewson to continue its development.

As were many parts of the existing Internet, cryptography, etc. It usually holds true that protecting privacy and enhancing communication is directly inline with the goals of governments/militaries, the general public, and even corporations, except when the communications/privacy of one of those groups somehow impacts the other, in this case the privacy of the general public impacting the potential bottom line of for-profit corporations.