Maybe the difference here (re. cityprod's post) is that there are stronger regional identities in much of mainland Europe? Many countries there are federal states which were only united comparatively recently; Britain has a much more centralised history by any comparison. Even some (obviously not all) of the ITV franchise areas were artificial compared to say, the states of Germany. That's bound to have a significant impact on what works, or doesn't, where.
A solid point.
In Northern Ireland, Scotland and Wales you at least have some degree of shared regional identity, accepting the fact parts of Wales don't like each other and the north of Scotland feels slightly alienated by the central belt. The establishment of national parliaments and assemblies points to the fact that something had to change in those territories.
In England, people in north London don't give a toss what happens in south London, and people in Manchester and Liverpool aren't huge fans of each other. And there may be City Hall in London and local councils elsewhere, but traditionally everything else has looked south.
I do believe local TV, and not just news, is hugely important. Or perhaps what I think is important is decentralisation. We can't just have a scenario in which all our broadcast media comes from London. If you live in London you have an entirely different perspective of the world to someone in Glasgow, Edinburgh, Leeds, Cardiff or Scarborough. And it means there's far less opportunity for someone from the rest of the country to make it big as well.
It's not a sexy area to get involved in, but if the BBC decided to go full pelt at it then it would be a huge case for its future going forward. I suspect, in terms of comments made about local radio recently, they're aware of that as well.