It seems that you are suggesting that iphones should contain a database of every site on the internet so they can run search queries locally, which is a bit weird, not to mention it would make it impossible for spotlight to show recent results such as football scores.
My point is, that even "disabling" spotlight outbound searches, keystrokes for local searches shouldn't still be sent into the iCloud [which they still are].
Not everybody uses Spotlight for global search. Disabling this "feature" should actually disable it.