Best I've heard is that it is to encourage local nodes as using a remote node sacrifices some degree of privacy and may provide a false sense of security - is there anything more?

Are there any technical roadblocks preventing encrypted communication between a wallet and a remote node?

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I'm not qualified to answer this but I'll provide this in answer in the hopes that someone more qualified will step in. There is no reason why you shouldn't connect to a remote node, but any node you connect to (local or remote) should be your own, because you can trust your own nodes. In any case, if the node you are going to connect to is remote, you should encrypt communication from the wallet to it with a tunnel. Once zeromq communication has been implemented, tunneling will no longer be necessary since the communication will be encrypted automatically by zeromq.

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