That would be the sane thing to do, but not the post-iPhone thing to do. "Your performance is worse, and you can't use our product when your internet is down, and you don't have decent privacy, and you need to remember a login... but, hey, no need to carry a usb drive!"
Funnily enough iPhone/iOS itself is trying to do as much locally as it can.
I probably should have written "smart-phone era." While Apple has been pushing "services" lately, I didn't intend to imply that Apple was behind the trend to store data in the cloud. It's more the fault of Google and other companies whose bread and butter are websites (which they subsequently shoehorn into phone apps).