Depends on what you mean by local service. From a news point of view, WDEL has become the best source at providing Wilmington and Delaware news on the radio, after the News Journal. WILM still is in the game too, but with all the cut backs that their CC master's in Texas required, they're a shell of their former selves, but still do provide quality Wilmington and Delaware news in spite of the cutbacks. With no real daily TV news coverage for Wilmington (other than Channel 12's once a week news magazine show "First", WDEL and WILM do provide an important service to the community.
I haven't listened to WSTW or WJBR in years so I don't really know what they do locally, I believe WJBR does offer a short news headline a couple of times during AM drive, don't know about PM drive, can't comment on WSTW at all. I know that WDEL/WSTW/WXCY (Delmarva's cluster), WILM/WWTX/WDSD/WDOV/TOM-FM(CC Delaware's cluster), and WJBR all do offer traffic and local weather info. So from those points of view, Wilmington area radio is still offering some local info content.
However, to your point, as the WIFI wireless internet gets more popular (I've not spent the money for this, but who knows maybe some day I will) then what you are saying could be the real future of local originating "radio" as in internet radio as it will be as portable as a transistor radio (this is the big draw back to satellite XM radio is it's lack of portability). Who knows, maybe one of the Wilmington radio stations will launch an internet station of their own. Of course, you can "listen live" to most of the Wilmington radio stations now online, so they might not see the value of starting a separate internet station. However, some new comer, who's doesn't have a official radio station, who wants to shake up the Wilmington market a bit, could do just that. The bigger question would be how would these internet local yokels make money, selling ads? That could be the next wave in radio's history, from over the air radio to WIFI radio. Also, would these internet WIFI stations spend the money required to have a quality news department as WDEL and WILM, and yes the News Journal, have provided for years.