"You can sovereignly host your own PDS"
Yes.
"... and entirely control your identity on bluesky"
No. The PDS stores your data, but BlueSky maintains a central registry for IDs in their network. In theory, you could run your own ATProto ID registery. But from what I understand, it would be incompatible with BlueSky. It would be the equivalent of forking BitCoin to create your own blockchain. You can, but it doesn't allow you to transact over the BitCoin blockchain.
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My understanding is that AT relays basically operate like a Nostr client does (obviously there's other differences in the protocol too tho). Even though another AT relay couldn't interact with Bluesky, it could pull from the same PDSs so people would be able to interact - just like how Nostr clients don't directly interact, but we're speaking since our clients are connected via relays.
I think the plan is to spin the directory out into some sort of ICANN like non-profit. Who knows, maybe one sunny day ICANN themselves will absorb the spinoff to become names, numbers and other identifiers.
Of course many a startup has abandoned such benevolent plans. They do seem like a passionate team though.
"I think the plan is to spin the directory out into some sort of ICANN like non-profit."
Or instead of reinventing the wheel, they could just use DNS for indentity, like the fediverse does.
Mike Macgirvin's work across Zap/ Streams/ Forte proved that NomadicIdentity can be used in an ActivityPub network. Takahē proved you can support many domains one one AP server. If all AP software supported both, you'd have BYO domain and fully portable accounts in the fediverse, without any of the centralisation of BS.
"many a startup has abandoned such benevolent plans. They do seem like a passionate team though."
Indeed, which is why they talk about a future version of BlueSky as a potential adversary, as discussed in this [detailed rundown of ATProto's pros and cons](https://dustycloud.org/blog/how-decentralized-is-bluesky/) by Christine Lemmer-Webber of Spritely Institute. They know it's vulnerable to enshittification, just like any other centralised platform.
Remember all the big EvilCorp platforms had open APIs when they started, and openwashed this as distributing power to users and third-party app devs. To paraphrase The Matrix, we've been down that road, we know exactly where it leads.