You can still use it physically, just it won't work over network...which seems absolutely reasonable (its a smart device that has a backup non-smart function)
I'm glad it seems reasonable to you. It does not seem reasonable to me.
This is essentially the Google philosophy, and it stands in contrast to the Apple philosophy. Yes, Nest is ex-Apple people and followed this bad pattern before their acquisition by Google, but still.
Apple HomeKit-certified devices don't communicate with Apple. They establish secure local connections and operate locally. For home devices, this makes good sense to me. It means, however, that HomeKit-certified devices have to be powerful enough to establish secure local connections, which the first couple of generations of IoT devices were not.
I'm willing to wait longer and pay extra to get devices that don't require a third-party corporate intermediary. Anything else seems unreasonable to me.
This isn't a defense, but Nest products worked this way before Google bought them. A lot of smart home stuff works this way, I am guessing because it's easier to setup, manage and troubleshoot.
Unfortunately it makes buying this stuff a pain because you have to research who owns what and what kind of control you have.
I just buyed an air cleaner, and amongst other I looked at the one by Xioami. To operate, requires you to install an app which tracks you locations and sends it to Xiaomi servers. This really troubled me.
I ended up buying one which can be operated without an app, which there seems to be fewer and fewer.