Insteon was a great choice because it is fully local control. The cloud features were a bonus add on and not required. The devices communicate directly with each other, links can be established between the devices by using physical buttons on the devices themselves, etc. Hardware even exists to setup a local sophisticated automation controller to perform advanced functions and greatly improve the ease of use for the whole system. Apps exist (or plain website access) to control the whole system from your phone or other devices locally or remotely using ordinary network connections with no use of the cloud.
It was a great solution precisely in line with the reasoning of hating all the cloud connected stuff.
Adding cloud functionality lets you interface it with Alexa devices and others for easy voice control. There was community work done that even allowed control from these devices without use of the cloud.
Insteon sold a hub solution that was cloud dependent but was easier to setup, had an app, etc. that worked out of the box. Those that used this hub - That's what is no longer working with the loss of the cloud. They could switch to another controller that doesn't depend on the cloud (e.g. Universal Devices ISY994) or not use a controller at all. Their switches and devices themselves will all still be working locally in the meantime.
That is until they fail and can't be replaced. That's the real problem here - replacement of devices when they die. Looks like none of this hardware will be available much longer and some important devices have been out of stock already for many months.