Two issues -

1. Local models are likely to be more power-expensive to run (per-"unit-of-intelligence") than remote models, due to datacenter economies of scale. People do not like to engage with this point, but if you have environmental concerns about AI, this is a pretty important one.

2. Using dumb models for simple tasks seems like a good idea, but it ends up being pretty clear pretty quick that you just want the smartest model you can afford for absolutely every task.