This was raised during bug 22475. To sum up what was said, isLocalFile is not totally right as the resource can be remote but mounted in the local filesystem. isFileURL would be more appropriate and stick to what the method is currently doing.
Darin, could you tell us your thoughts about this renaming?
Seems OK. I don't like the idea of repeating the class name, URL, in the function. Maybe it should be protocolIsFile to be a member of the "protocol" family of functions. If so, then it would be good to have a version that works on strings too, just like protocolIs. And have protocolIsJavaScript too.
*** This bug has been marked as a duplicate of bug 257316 ***