Adding a wrinkle to the memory answer, because I think tooling gets unfairly let off.
The gap is partly context length and partly that the hosted product was doing a lot of retrieval work you never saw. It was choosing what to put in front of the model, which files, which fragments, in what order. When you run locally you inherit that job, and most local setups do it badly or not at all.
Which means two people with identical hardware and the same model get very different results, and the difference is entirely in what the harness feeds it. That is the part people skip when they say local is not good enough, and it is the part you can actually improve without buying anything.
So before concluding the model is the limit, look at what your setup is actually sending. Mine was sending whole files where a good chunk would have done, which wasted the budget on imports.