Yes… But obviously only “official/approved” Device Handlers and SmartApps are candidates for whitelisting, and still, SmartThings is likely to want to whitelist as much as optimal (ie., rarely used SmartApps or special odd Devices are a waste of memory, but popular ones are worth offloading from the Cloud).
Yes… Local execution is unfortunately currently also contingent on the entire set of Devices being local as well. It would be nice if they could hybrid within one SmartApp, but difficult to decide what to do if Internet is down or extra latent.
Yes… The announcement that “local Devices and SmartApps” are only distributed by a firmware update is really really disappointing as it fundamentally reduces flexibility. Different customers use differ sets of Devices and SmartApps and it is inefficient to push everything to everyone. This architecture makes modular / isolated testing difficult too. I guess even with the many months delay, SmartThings was just unable to come up with a reliable way to do modular distribution or a “cache model” that was implied by @hagins during Developer Call. I’m sure that there are good reasons and serious complications, but… Thought ST Engineers were geniuses.
BTW: WigWag has also proposed a modular caching architecture. I wonder if they manged to get it working.
.4 Another major remaining weakness is no ability for the client App to connect locally (and other local APIs). But not a surprise.