Quote from QuantumMenace: Go
The removal of local hosting is the most disgusting part of it in my opinion, especially since they never even mention it. In order to use any custom content in multiplayer, you must upload it to their servers and subject it to their restrictions. You can't even get around the size limit with a downloaded SEMPQ (as a group of us did for a while in WC3, about 300 MB of assets for a custom map) without the risk of being banned. Similarly you can't use a utility to remove the forced latency that is destructive to WASD and other custom control schemes.
Almost a whole year later, I still think Iskatumesk's concerns about local hosting still hold weight. I think the only hope for it (and therefore LAN as well) is if Blizzard abandons the map marketplace, since that's likely the main reason they don't want us hosting (possibly "premium content") maps without their permission.
I'm a little late on this, but this is exactly what pisses me off the most as well. If something is killing the modding scene, it's the way they force people into their popularity contest, not to mention the ridiculous restrictions. It's like people are making maps that they think will be popular instead of maps they want to make. I kind of hope they're just waiting until the expansion to sell us local hosting. Probably not, but I'd be happy and disgusted at the same time (I'm already disgusted). It's such a shame, Starcraft 2 could easily have been Blizzard's best game yet.
EDIT: That's a pretty great post by Iskatumesk, he said it better than anyone ever could. I read it during the beta, but I refused to believe it because I didn't want to believe it. Even after the release I was thinking that in a month or two they'll actually finish the game and everything'll be fine. God I'm so angry right now.