Local seems like an early internet drawing board idea that didn't take off and got forgotten, it practically sounds like something you could gaslight quite a few people into developing fake memories with a few consistent looking artifacts from the BBS era. In fact much if it is a reinvention of BBS essentially as it had soft localness due to long distance charges for phone calls for modem connections. Mail readers were an option to minimize BBS connection time.

Neighbor trust wouldn't last long if it even existed in the first place as soon as easy targets getting hacked became a thing. Most people leave their routers secured by default and even ISPs who use them to distribute wifi "publically" are supposed to leave them secure indicating the preferred level of local network interaction is generally "none".

The locality is a worst of both worlds, arbitrarily limiting discovery if they want to see and be seen and not providing any security as anyone could bridge access within or likely spoof an identity. It seems like something which would rapidly wind up redudant for all terrestrial applications even if it existed earlier.

Distant ones I suspect would either tolerate the higher latency or maintain mirrors or caches - which would likely wind up a subset of the content which doesn't depend upon being current and would probaby become a format which doesn't mind the "necroposting" and delayed reactions as you get hours or days later space responses.