If you load a file using the “file” protocol, it shouldn’t be able to load other resources (JS from the internet) with non-file protocols to protocols (http, https, etc.) to non null-string domains. because that would violate cross origin request sharing (CORS).
I too like local HTML and would love to see it restored without requiring a local server. If I spin up a local Webrick to serve anything from my file system, I’m no better off (except maybe that it’s scoped to a particular directory and children).
People expect to be able to download an HTML file and for it still to be able to load an image with an external URL. If it can do that, it can exfiltrate (eg js can put data loaded from a local file in the src for an image on a external server).
When I save an HTML page, the browser downloads other resources the page wants. This is how it should work for The Average User. Saving just the HTML should be the exception for more technical users.