iCloud's free storage tier still being stuck at 5 GB as the base phone storage has grown to 128 GB is the main thing I'd criticize. You realistically can't use iCloud for photo storage or backups with that plan. I bet most people can blow through that just with Messages history if they have anyone sending them videos.
I think the upgrade prices are reasonable, $1/month for 50GB and $3/month for 200GB, but I can see characterizing that as nickel and diming. They should have bumped up the 5 GB base plan years ago.
When did Apple start disallowing local backups? I'll admit I haven't tried recently -- there's no data worth backing up on my iPhone anyway -- but it definitely worked just fine a few years ago. Apple's "Back up iPhone" support page[1] agrees with me.
Local backups still work fine, you just do it in Finder now instead of iTunes. Not sure what the situation is for Windows users.
As far as comparing prices, yes, a bare hard drive is cheaper but I'm paying for that storage with services and backups attached to it. A hard drive won't automatically sync photos between my phone and my computer, and I'm more likely to have that hard drive fail than I am to lose iCloud.
Replacing iCloud storage with a big hard drive is a bit like replacing a car with a motorcycle. Yeah you can buy way more acceleration for less money, but good luck moving your furniture.
I think the upgrade prices are reasonable, $1/month for 50GB and $3/month for 200GB, but I can see characterizing that as nickel and diming. They should have bumped up the 5 GB base plan years ago.