You can see their strategy at work here.
It is possible to keep individual files on the local hard drive with different settings (that in my experience never seem to stick past updates).
The default, though, is to take everything on your computer off of your computer, put it into the cloud (their computer), and recommend you pick and choose which ones stay on your computer. In essence, they want you to think of your computer as secondary to their computer. An extension of it.
There is no “your computer”, it’s just the computer you happen to be logged into at the moment.
The cloud is not something you take advantage of, the cloud is where you live now.
iPhones will report it too if they have Maps open.