You're focusing too much on the home assistant part, and not enough on the local control part. There are solutions with hubs such as some parts of the Wink hub that do work locally without internet. I'm sure there are professional-grade installers who install various pieces of software that use Z-Wave and/or Zigbee to setup a locally controlled home automation solution.
Needing connected to the internet (and all the latency associated with it) is an anti-feature that most consumers aren't even aware of or think of, hence why I hope solutions that have the feature aren't crowded out before the market for home automation truly takes off
Sorry if I wasn't clear. I agree with you that local-only solutions are needed. Home Assistant is sucking up too much of the air in the room. I don't think it will ever be accessible or usable to the general population. If not for Home Assistant, I think the community would have developed better local-only solutions by now.
Needing connected to the internet (and all the latency associated with it) is an anti-feature that most consumers aren't even aware of or think of, hence why I hope solutions that have the feature aren't crowded out before the market for home automation truly takes off