- Root DNS and most of the cloud providers are in US jurisdiction. US declared Russia as top 3 enemy and applies random 'sanctions'; - Russian (and EU) laws require companies to store citizen's personal information locally; - many lazy developers and service providers relied on AWS/GCP thus breaking the law.
Telegram blocking attempt has shown that even some government resources are hosted outside Russia. In case of severe confrontation escalation US/NATO will cut DNS or will engage in cyberwarfare operations against Russia. So Russian government wants to make sure that Russian infrastructure will continue to function properly.
This is not PRIZM or Great Firewall of China type of system or regulation. There are no plans to cut off internet. There's a group of people that spread FUD and hype around this initiative.