Provided they have a way to easily rotate keys via access to the physical hardware it's probably fine. If a local government loses a signing key they would have to register a new one and send a work crew to swap a micro SD card in every traffic light or whatever, but at least that's all they would have to do. In the meantime all an adversary can do with their signing key is install fake beacons, but that requires actually fabricating beacons, and putting themselves at risk by physically installing them in a place they will quickly be noticed, so the potential for damage is pretty limited. Much like how people can already steal stop signs or put up their own speed limit signs, in practice I don't think this will be more than a nuisance.
> If a local government loses a signing key they would have to...
They'd have to know they were compromised first. I think that is a big 'if', and creation of a centralized repository of backdoor keys makes for tempting targets.
