Local co-op died (and should stay dead) because of the fact that even with large screen TVs means having to have both players functioning on the same screen... meaning that instead of the camera and thus the entire screen focused on a single player, you have to either split the screen (reducing the amount of useful information being given to each player) or they are both locked to having to operate on the same screen but since the camera is not locked onto a single players, you often are trapped within the boundaries of the screen edges or have to deal with silly micro bubbles or windows that provide nearly zero information once you are off screen.
Local Co-op for anything besides fighting games is a terrible concept, limiting information and detail to split a screen in two or four in local co-op is just wrong. Meanwhile the vast majority of online co-op assumes each player is going into the game with their own system and screens, meaning that they can give as much information and detail to each player in terms of gameplay that they would have playing it solo, leading to what could qualify as a better controlling experience.
This is not always the case but even the big Nintendo multiplayer games (IE: Anything Mario related) suffer the moment you have four people playing. Nothing ruined several of our parties faster than someone pulling out New Super Mario Wii trying to watch a bunch of 'friends' trying to co-operate to get through a level... it was terrible and while fun for a few moments, lead to people either getting so frustrated with four people on screen at once and quitting ('luckily' they were big parties so someone was willing to join in to take over for the pissed off person) or people actively trying to screw over their fellow players. Not exactly the best show there and this happens almost universally when ever the big Nintendo local co-op games (outside of Brawl) come out. It is enough to turn someone off from trying to play these games.
As for PC, not a lot of people have multiple controllers and honestly, if you have multiple people in an apartment or home that play a game, why not just LAN them together and play rather than trying to get two controllers plugged into the same machine and be restrained by cord lengths?
Local Co-op is a legacy concept and should be quietly retired because what ever small benefits it still has lingering is not honestly worth retaining.