Love your rules.

My personal situation imposes even stricter versions of your #1 and #2:

1. No network, no problem. Anything core to the house has to work with Wi-Fi or automation server shut down.

2. Smart functionality must not remove dumb functionality.

As one example: having a physical switch that controls a light and the switch can be operated by automation is good. Having automation control a light and the switch just tells automation what to do is bad.

This does make things hard sometimes. For instance, your sprinkler controller doesn't pass that bar. In fact the only one I've found so far that has a local API for automation plus full "dumb" on-device control (no Wi-Fi, no app) is RainMachine, and they are gone. If only OpenSprinkler hardware had a touch screen for local UI.

I tried to stick to this philosophy, specifically the part about it working even if my local automation server is down, for a long time. But I finally found an automation case where I wanted functionality where I could not simultaneously have the functionality and have the switch continue working when the server was off.

Specifically, I wanted the switch to turn on different lights depending on the time of day. In the evenings in early morning I wanted it to turn on the dimmer floor lamps, and during the day, I wanted it to turn on the brighter Center room light. This was not possible without turning the switch from a light turning on device, to an automation activating device.

I thought really long and hard about if I was worth the trade off, and in the end I decided that my automation server was only likely to be down for significant periods of time if the power was out and the lights weren't working anyways. If I run into a situation where this becomes a problem for me, I'll reconsider my decision. Which is a great thing about the local control. If I make a decision that I don't like I can just change it.

The best devices have a local web interface so you can control them with your computer (like how you control your router).

Unfortunately, almost no lan connected devices sport such an interface.