Sadly, local multiplayer is a dying art as connection speeds get faster for the end user.
Not only is this not reasonable for smaller studios, as they must do things like pay to maintain servers in several geographical locations, but the online multiplayer model isn't even right for every game. Imagine Mario party played online.
Deciding how the game is played is all about figuring out what supports the experience you want to convey. You don't see much local co op on PC because
A: The control scheme of mouse and keyboard is better geared towards FPS or strategy games (which work best when a player gets a screen all to themselves) and B: Most computers are connected to the internet all the time anyway.
Now that said, I still believe there's demand for such games on the PC; this is evident by Jackbox games and Gang Beasts being available on Steam. People, like myself, who don't have consoles still want to play couch co op.
This is actually an issue I'm tackling with my own project, as I plan to have local multiplayer, but I'm still weighing the pros and cons of just opening it up to LAN or having it work both ways.
TLDR version: I like the idea of local multiplayer, do what's right for your game. There is no such thing as a dead genre.