How would you mitigate fire or theft if everything is local?
I own a safe. My backup tapes go in there. I trust my most important documents, jewelry, stock share paperwork, etc. to sit in there, so my backups are as safe as my most important documents.
I understand that most folks don’t have access to tape drives or servers, but with the price of USB disks being so low these days, I don’t see why a technology savvy person couldn’t buy two and rotate them accordingly.
It really comes down to urgency of backup. Most folks backup family photos, music, documents, etc. Others have financial documents and other important errata. The more important the data, the more serious the need for a backup. While backing up “in the cloud” is great for data retention and anywhere-always-on access, local backups are for your eyes only, realistically, and the possibility of hackers getting their hands on your stuff is much lower than if you have media in a fireproof safe.