There wouldn't be much of a reason to keep the WDW points if I lived close by. I find my own house to be much more comfortable than hotels or condos, so paying extra $$$ to stay in downgraded accommodations, having to deal with housekeeping/maintenance issues, check-in times, etc when it's not necessary, just wouldn't make sense.
Of course, as others have pointed out, it might make VGC or Aulani points a little more appealing to me.