(1) If you are letting people code their own event handlers you wouldn't trust them to run them on a tiny machine like that.
(2) A system like that probably wants to be able to respond to events both inside and outside the house. For instance, turn on your lights remotely with a phone. A cloud component is the reliable way to do that.
(3) At the time I couldn't find decent Zigbee or ZWave hubs other than the SmartThings hub. The cloud dependence is silly, but other than that the hub is great and connects to almost everything. I could go with a Kickstarter hack or try to roll my own but I don't think it would be much better.
