> You just could not remotely control it from outside the house
And what about disabled folk who might rely on the smart functionality of the house to have something resembling an independent life? Or the elderly? Even if e.g. a smart bulb fails gracefully and becomes a non-smart bulb in the absence of the cloud, it doesn't help if you have cannot operate a normal light switch effectively.
A lot of comments on this article seem to think smart home devices are only for the lazy or are toys for people with more money than sense, but there are plenty of "legitimate" use cases as well.
Also, while I would never want to use it myself, relying on the cloud is perfectly valid - the simple fact is most people are incapable of hosting and maintaining their own smart hub [1], and Insteon fucked up big time by not having a better transition plan.
[1] https://www.nngroup.com/articles/computer-skill-levels/ The source is paywalled, but this article is a decent summary. TL;DR if we assume running your own smart hub is a "level 3" task, only about 5% of people in a country would be capable of doing so.