There's some drawbacks to direct investing that I think will keep "Joe Investor" away from it.
Vanguard S&P 500 costs 0.03% per year, and automatically invests your money in 500+ stocks. So if you have $10,000 to invest, that costs you $3/year. You can buy more and pay that same expense ratio on new funds.
Now compare to direct investing. Most brokerages charge $0 to buy and sell stocks - so far, so good. But there's a lot of math ahead to buy a market cap weighted index: adding up every market cap, getting the percentage of the market for each stock, and multiplying by your investment. Was that math worth $3/year?
And now the physical purchase, which is made 500 times. Good luck making zero mistakes! That's 500 buy orders, one for every stock in the S&P 500. Another added bonus: each of them will send you proxy materials, so expect hundreds of emails asking multiple times to remember to vote!
And if this is being done at Vanguard, you can't directly buy fractional shares. So when your spreadsheet says to buy $450 worth of Amazon... which costs $3,150 for one share, so you can't buy it. Maybe that means direct indexers have to move to brokerages that offer fractional stock shares, and leave Vanguard.
Most people don't invest one lump sum - they invest several times a year. Someone investing quarterly will manually input 2,000 stock purchases per year... and save $3? And when their portfolio grows to $100,000 they're now paying... $30/year. Or they could move to Fidelity's zero cost fund.
So to me, there's a lot of obstacles before the average retail investor begins to index with direct purchases of stock shares.