I agree with your final statement " that algorithmic decision-making, contrary to the popular imagination, could actually lead to more freedom, by expanding the space of tractable possibilities."
Well formulated. I am confident that some version of this will be forthcoming. One posssibility is programmable matter of different kinds, (like claytronics , or even synthetic biology. These approaches could be used both to fabricate any digital design, or using algoritms like you suggested.
Here is one good article on the subject:http://spectrum.ieee.org/robotics/robotics-hardware/make-your-own-world-with-programmable-matter

The future is bright, and weird.