We are going to change this in future releases for this very reason. But you still have the issue of localization, DDT, etc. that will still be SQL based, so you would not be able to search for or add new localization keys which is generally not the issue.This will be in an XML format most likely. As for when, it will probably not happen until fall. This is a pretty big change, but it is most definitely something that we will do.
As for working locally, just install a local copy of SQL Server Express and load the SF database on that local machine. It will eliminate all of the timeouts. You can create as many SF connections as you like to the SF database, so just create one for working local...this is what I do.