The peak load of a house is substantially higher than the per-house peak load of a city. People don't all turn on their ovens/dryers/hairdriers at the same time.

You could distribute this capacity at each house and feed it back to the grid during peak times. But is TCO of 1000 * 100kWh same price as 100MWh worth of capacity?

If you're going to have the battery anyway(a car) its hard to compete with, but once you need more capacity, I'm not sure it makes sense to distribute it quite as much.