Yes, you could in principle convert any memory within a given loop into a separate unit. You just gotta pick between the tradeoffs between having more I/O and software/hardware units, versus having more memory within specific software/hardware units.

You just gotta find a balance that works for your requirements and constraints. In my application (it was medical devices), we found that stateful loops fit nicely.

True, but you do want to test the emergent control system.

That's the irony of closed loop control systems. They appear to be simple but the emergent behavior, particularly when there is a hierarchy of control loops, is incredibly complex.