(Edit: In terms of privacy as there are benefits in terms of speed and offline work)
It's not like we're not already storing all of our media on the cloud (including voice), passwords and other sensitive data.
Even with something as simple as dictation, when iOS did it over the cloud, it was limited to 30 seconds at a time, and could have very noticeable lag.
Now that dictation is on-device, there's no time limit (you can dictate continuously) and it's very responsive. Instead of dictating short messages, you can dictate an entire journal entry.
Obviously it will vary on a feature-by-feature basis whether on-device is even possible or beneficial, but for anything you want to do in "real time" it's very much ideal to do locally.
Edit in response to your edit: nope, on privacy specifically I don't think most users care at all. I think it's all about speed and the existence of features in the first place.
I have to assume this is due to connectivity issues, there is no other logical reason why it would take so long to figure out what I said for so long, or not have the data on what the time is locally.
Apple has been on both sides of that coin and what is ethical isn't always clear.
> what is ethical isn't always clear
So...?
I think most users care if actually given the choice.
I think most don’t, but they do care about latency, and that’s lower for local hardware.
Of course, it’s also higher for slower hardware, and mobile local hardware has a speed disadvantage, but even on a modern phone, local can beat in the cloud for latency.