Some other issues:
- doesn't work in IE
- saved data doesn't expire
- Storage keys aren't unique to the URL, so if two pages have the same exact layout, but different content, identical forms on the page will be filled out with stored information.
So it's a good concept, but I think that there are definitely some questions about user privacy, and that it needs to be paired with some extra UI cues that make it clear to the user that they're looking at draft information, and not something that's saved.
Keep you API open and flexible for the UX designer to choose what's best when. Also, if it's showing local data do something simple, like give the field a class of "garlic-data". That way the UX designer can choose the best way to differentiate it for their use case.