It's the browser javascript that I would worry about; responsiveness is always a battle.
Besides the confusing fact that you bring HTML5 local storage into the equation for some reason, a local web server doesn't necessarily mean more complex deployment/maintenance than maintaining a .NET application.
Also, pulling numbers out of nowhere isn't going to help your argument.
3 and 5 years are the common life cycle's enterprise IT use when discussing any existing implementation or any new system design. These are not pulled from nowhere.
Oh and as far as I'm concerned "3 to 5 years" is still pulled out of nowhere. You aren't mentioning any sources, just describing a really vague process that you think is "common". If you have a working, flexible system with which you can harness a huge continuous effort in developing the technology behind it for free, you aren't going to kill it off just because your enterprise clock says so.
I started with a small "industrial" computer — Intel D525, 2g RAM, 40g SSD — costing about $300. I installed Ubuntu 12.04 Alternate with X and Fluxbox. I used Chrome for the display. I configured it to log on automatically upon booting, start X, and run a script configured to start Chrome pointed at the proper URL.
Then I used remastersy† to create an installation USB stick. Boot from the stick, and it installs the customized Ubuntu non-interactively. The first time the system boots, it runs a little dialog where you tell it its role in the system (i.e, what view of the overall status should it display).
If you later need to reconfigure it, you can log in over SSH and run scripts to change the configuration. Or, if absolutely necessary, you can visit in person, open the cabinet, and hook up a keyboard.
It spends almost all its life waiting on an XHR, which asks essentially, I'm showing version x, send me the next version when ready. When version x+1 comes along, the server replies to all the XHRs waiting for version x+1 with a chunk of JSON describing version x+1. The displays then all update their DOMs and hang an XHR for the next version.
I later added a separate heartbeat loop. Once a minute, it asks the server if it's alive, and it puts up an out-of-service screen if the server stops responding.
Actually on that note I'm surprised I don't see more community/charitable notices in the mix for digital boards (these could serve as "defaults"). Having non-commercial and regularly changing ads in the mix would actually get me watching, and is potentially even tax-deductible.
The biggest reason for html as the menu format was it would be the best format (in terms of flexibility) to use for the display content and localization. The local db was embedded FirebirdSQL, and connected to a remote Firebird instance running on a central server (transactional data was replicated as connectivity was available, and it wasn't more than half the time)
If I were going for a digital signage solution even two years ago, I would probably lean towards windows. There still aren't tools for developing visual animations that match what Flash (though deprecated) offered. Flash is really easy to embed in a full-screnn app, and offers a lot of flexibility for the purpose. The tooling is broadly available, and setting up a canvas of the right proportions is all you need to start.
Flash costs a lot more than Windows even. IMHO The cost of software licensing is really minimal for most companies for these kinds of things.
Today it would be a tossup of a windows solution with Flash and/or an embedded or otherwise chromeless/fullscreen browser and a linux solution. If I were to guess, the windows solution would probably be done faster. Dealing with multiple displays and orientations in Linux is much more of a PITA, let alone that VS is actually pretty decent.
You wouldn't use localStorage for images.