A little over the top, I think. In most places, the big problem with local government is getting anyone to run for it. Big city local government may be something else.
Great post. I recently posted a vanity about the same topic, tyrants close to home.
The cell phone example isn't a very good one, but there's some truth in it. I've had some experience with the tyranny of small-town government, and anyone who doubts that small-time officials can be tyrants should review the actions of school principals wielding zero-tolerance rules for the past few years, not to speak of social workers and children.
Nevertheless, the principle of subsidiarity is a good one. Things should be done at the lowest possible level, nearest the action, better informed, and with a shorter chain of command.