You can have IoT devices with LAN only. IoT doesn't mean that it needs to understand DNS and access WAN. For that you can have IoT gateways with proper security in place.

The problem with "part of the device lifecycle" is planned obsolescence. I would be up for it though if manufacturers are forced to release the source code and all service information they have the same day they drop support/updates for a product.

Edit: I don't think you realise how many applications of lot of "IoT" things have where they are only on a LAN with 0 internet access. Internet access should be optional, not mandatory.