If I recall correctly, they're doing more than just giving you a graph of bandwidth consumption. They're giving you views of the data that show which apps are consuming the most data among other things. I can imagine why this may need additional processing - maintaining a mapping of addresses that make up "Dropbox" traffic as an example.
I always saw it as an attempt to put analysis/QoS tools into non-technical hands. You can absolutely do many of these things by yourself, but that's not who they're targeting.
I can certainly understand how some features in the list would require sending user data to Trend Micro - blocking malware domains, for example. This makes sense - and it already happens with all the major browsers.
I am less sure why, for many of the other examples in the list, the router can't just receive updates from ASUS/Trend Micro without sending user data abroad. Maintaining a local list of common software and popular services is not that onerous for such a device. People with less common software are not likely, as you said, to be who they are targeting.
As I understand the article, the current EULA means I have to give access to my data to a third party if I want my router to receive some useful information (say, mapping) from them. This is information which they could just give my router anyway, without needing my data, in many of the cases for which the EULA is required.
Ubiquity's products do traffic analysis locally, as you propose. Their Edgerouter X is MSRP $49 USD.. It's based on Debian/Vyatta.
On the router, without sending data to someone else's computer, it will give breakdowns based on Protocol & Destination (e.g. SIP, IMAP, Amazon, Facebook).
As I understand the definitions as downloaded periodically/automatically from Ubiquity.
So yes, this is not just theoretically possible, this capability exists in the marketplace, and it's demonstrably inexpensive to do.
