The real issue is reliability.
WiFi, while relatively easy to implement in any consumer product, just is not as reliable in a home automation scenario.
WiFi aka wireless TCP/IP is a great protocol for delivering messages and data, but it was never intended to “control” devices, especially over wireless. The big challenge for WiFi is it is point-to-point. That means your device talks to the router/ap, that device then uses the TCP/IP protocol to decide how to route / relay the message to a wired or other wireless device. The devices don’t talk to each other directly (at least on the radio side, only the IP side). That means if your AP is badly positioned in the house, you will have dead zones where the signal won’t reach. You also have to deal with wireless congestion (those cut outs on your streaming media).
Z-Wave however, was designed to “extend” it’s wireless footprint. I’m generalizing, but just about every hardwired device (light switch, outlet or similar) probably has a built in repeater function. That means that so long as you have one every 50-150 feet you could literally cover your house, garage and back deck/shed area on one “meshed” network. The frequency being used also penetrates (extends) much farther. The down side is that, it’s not designed for lots of data (i.e. streaming media, pictures etc).
Another key issue on reliability is that if you physically change that light switch to z-wave. Well it works just like the original light switch, hub or no-hub, internet or not… This is key for many of us that have a few ZigBee or WiFi devices on our network. They just are not as reliable as they are typically “plug in” devices. That makes them easy to move around quickly, but not so great on reliability and consistency. If you look up the GE bulb/TCP bulb examples you’ll see people struggling with reliability.
Lastly on reliability. As the other poster mentioned. Z-Wave is really easy on the batteries. The devices “wake and go back to sleep” as needed, allowing for longer battery life. Since they can use the repeater function of other z-wave devices, they consume less power for their radios (broadcast power). They also don’t need to negotiate and deal with congestion on the WiFi network. So in all a much more reliable, longer lasting device. I change my water sensor batteries once a year (same time as when I update my smoke detectors), but I’ve had one last over 18 months… Same for my door lock.
Going forward you will definitely see a mixture of z-wave, zigbee, Bluetooth LE (Low Energy) and yes WiFi devices on your hub.
The main reason, well the last 3 in that list require less technical expertise (i.e. they just plug in and can use the “UPNP discovery” protocols to be quickly added to the network). A light switch is beyond the comfort zone of most people to replace. Also z-wave, because it is proprietary is still relatively expensive for an equivalent device vs. the other items to build.
And finally… there is the big-bad-cloud. Z-wave device upgrades are not for the average joe. We are in a world where everyone expects new functionality and patches to just happen. Us older IT folks, are comfortable rolling up our sleeves and hacking the system to do what we want, but if you are an average person, and just want to plug that device in, well having the cloud automatically monitor, update and patch your devices is a bonus. But that means you are dependent on TCP/IP and some central cloud service provider. And the delivery mechanism of choice for TCP/IP these days is WiFi, since you get down to just a power cord in terms of device management.
So if you are in an apartment, or tend to move every few years, definitely go WiFi/Zigbee plug in. But if you are in a home and intend to be there for the next 10+ years… hands down go z-wave.