I'm probably way more thrilled than is healthy that the #1 reason being cited for use of on-board storage is redundancy. This because I've felt it was THE only reason to use on-board storage--right now. Folks who say you can do away with centralized recording due to on-board storage are way off base. It's just not there yet and may never really make sense but for some edge cases. I'm assuming moderate to higher camera counts. I'm also assuming there exist requirements for VMS capabilities that often make a lot more sense when the aggregate recording is colocated with the VMS software rather than on the end of a wire and distributed across the LAN/WAN.
To seemlessly support the redundancy use case we've still got a lot of work to do. There's a big difference between a "store and forward" type model vs a streaming to recording type model. Even if the camera firmware is smart enough to use the local storage as a long-term buffer, there's quite a bit of complexity around how to handle getting that video to the recorder when the network comes back, etc. It can be done, but as the cons point out there's going to be a lot of incompatibility issues between on-board storage and other components of the system for some time.
For now I suspect people are buying relatively cheap insurance by letting the camera record locally *and* to a central recorder so they have something on the camera even if the network is down or the recorder blows up. This can be a simple feature that makes good sense if we let it.