The pirates provide a better service with more content for cheaper than the legal options; and pirating yourself takes effort as well as cost (hardware, trackers, usenet, etc).
Some people are happy to just pay for decent service; others like to learn about the process, then setup and run their own servers.
You'd definitely have to declare it to the IRS minimum.
But yeah, a national news story? You're just asking for someone to 'find' proof it's theirs; if not inviting a mugging/robbery.
The middle-man provides plausible deniability in this case. PornHub can genuinely say they don't see connections from age-verification states atm. That stops being true if they host the VPN, making them aware of actual client locations.
It will definitely require corrections from GPS or other systems, but if made sufficiently accurate; it could be months or even years before the accumulated errors necessitate a correction.
What seems more concerning to me is a system like this would require 100% up time between outside corrections.
A gps receiver can acquire its position from a completely powered off state. Inertial guidence though, needs to be told its current position; then it can keep track of where it goes from there. If there's any hiccup with power, you've completely lost your location fix and can't reacquire it alone.
Put the two together though, and the inertial guidence can accurately fill in the gaps between gps service while also getting regular updates/corrections when you do have that signal available.