Routers are everywhere for distributing Internet connections. Proxy servers are really useful for reducing network traffic. A small increase in router hardware could make the router into a proxy server. Where are the router plus proxy server combinations?
You could build one yourself using an old computer and Linux but the power wastage would be too much for a device that runs all the time. A modern computer could perform the same function with less power wastage and would be noisy, due to cooling fans, and expensive because it contains far more hardware than you need.
Routers control the messages between a parent network, usually the Internet, and a local network, usually your home or office network. Larger organisations might have a general local network then individual department networks with the department networks separated by a router that keeps some local computing resources within a department hidden from the rest of the company.
For example, you might have a high quality large format photographic printer. If you let everyone have access, you could have hundreds of people printing their holiday snaps as posters. A router could let you share the printer with your team while hiding it from everyone else. You would not return from lunch to find all your expensive paper and ink wasted on endless images of kids smearing chocolate ice cream on puppies, pianos, and a Picasso painting.
Routers are commonly combined with switches so you need only one device to connect several computers to the Internet.
Small routers do not have fans because they use little power. Small routers grow in power every year and already have more power than is needed for the simple network filtering task between the Internet and your local network. Routers run addition tasks all the way up to Web serving for the administration interface. Proxy serving could easily fit in there.
Proxy servers overlap routers in the area of network message management and may include a local cache for downloaded files to prevent repeated downloading of the same file. Web browsers have a small cache to stop repeated downloading through each browser but cannot stop multiple downloads by separate browsers. A proxy server can cache all the files on a network to ensure a file is downloaded only once for all users.
You need storage for the files served by the proxy server. You need a lot of storage. A large SSD or a small magnetic disk is the minimum to store all the files you access across the day. Think of an update to Linux that downloads a 100 megabytes plus reading newspaper articles with megabytes of fashion images then a few hundred megabytes of a training course. You might have eight people in your office all reading the same pages are various times of the day. A proxy server will speed up the download times for persons 2 through 8 and those downloads will not eat up your download allowance.
An extreme case would be several people downloading a DVD across the day, as happened on one of my training courses. I told the students how to download a Linux DVD from the original source and how to copy or burn the DVD from my local copy. Several students decided to download from the original source. The network slowed down. Later that day that Internet connection hit a daily download limit and dropped dramatically in speed. The problem was several downloads of 4.6 gigabytes on a network that ran out at 10 gigabytes. A proxy server would download only the first copy then server all the others from the proxy server local copy.
There are routers with USB ports to let you connect disks for Network Attached Storage. The routers use Linux or Unix. Adding proxy server software should be easy. Allocating a cache on the disk should be easy. The cost of the components is now trivial. If many people adopted the approach, the total network traffic would reduce and everyone would benefit.