For silo self hosting, Internet outage should not affect your services, but for most of local-first services it's critical to maintain your systems security with necessary credentials. For an example consider a rental car that you take for camping in the countryside. Internet outage that makes your rental car useless is unacceptable.

I think i'm even more confused. Why would my rental car need network access at all? (it's already a shame and a great source of cost/problems that it has any electronics)

Also, what prevents my TLS/SSH/whatever certs from working in an offline setup? i do that all the time without downsides, so i'm probably missing your point. if you have a page explaining your project and usecase feel free to link