Sure. You can save files locally (SkyDrive is not compulsory) or you can have SkyDrive automatically sync docs on all your PCs and/or Macs.

But if you are creating documents online using the Office Web Apps in SkyDrive, then it would be very odd if the default storage was a local PC, tablet or phone.

All these things are true today under Windows 7 and 8 as well as 8.1.

If cloud storage is such a terrible idea, it seems odd that there is so much hype for Google Apps -- which apparently 100% of startups use -- and for Chromebooks and similar thin client operating systems.