Regarding the comment of sophacles, power distribution is part of the economic factor. It may be that the central plant is much more reliable than a backyard plant, but the power grid - subject to thunderstorms, ice, tree falls, backhoes, curious squirrels, and so on - makes the overall power supply system less reliable than a backyard fusion plant.
There is still a grid. If my power source goes out, I want backup to come from other nearby sources - the timeline of power restoration from the current delivery system is on the order of minutes or hours for over 80% of outages, and on the order of a couple weeks for over 99% of the rest of outages. If my power plant breaks, I need restoration numbers that meet that. (additionally, I need plant repair bills to be lower than however much money having the backyard plant would save me. TCO considerations again).
Further, these two assumptions are built into your "better" assessment:
* It is cheaper to have a power plant in my back yard than buying it from the grid.
* The backyard source can be made safe.
Combining these two assumptions is a big deal. If both are true, I will agree that it is a good option (with the caveat listed above). However, there is a HUGE amount of R&D to get there, including a massive set of efficient production runs for parts to build all the systems to make it happen. The economics of this points to it not being likely that everyone has a backyard fusion plant.
It is far more likely to see big fusion plants in greater number scattered around the power grid to provide higher reliability in the cases of line loss etc. Further, with energy now being much, much cheaper to produce, you'll likely start seeing more reliable distribution channels for electrical power. Overhead lines would be reasonable to replace with underground ones, which are less efficient, but are also more reliable as they are less likely to be damaged in weather events. You'll also probably see a reduction in star-topology distribution - more redundancy in distribution paths, at the cost of some efficiency, because the complex equipment will be cheaper to manufacture (you know, because energy to do so will not factor into costs anymore).
My hypothetical was to show that there could be cases where it does not make sense to use a Mr. Fusion type device to produce hydrocarbon fuel which is then used as the energy source. Everything I said takes place in the original fantasy world. Under the original premise -- "some grad student gets fusion going at a very low price" -- then it must be using some principle we haven't yet thought of. And with that premise in place, almost anything goes.
Once I put realism into place, then the original hypothetical is not sustainable. The long term solutions for real life are decreased energy use, fission, hypothetical fusion, and renewable. None of the last three can exist without a grid, at least for most people. The only way to be without a grid is greatly reduced power use, a less concentrated population, and switch to local renewable resources. That isn't going to happen.
(Although if we had that technology in cheap enough form, some of the major loads in your house may switch to DC to avoid conversion losses to AC, since solar panels and batteries are both inherently DC technologies, and that might make the inverter less important.)
