Running app locally -- yes, there's nothing wrong with that.
Running 25 different apps that compose "the platform" only to be able to develop something -- sounds overkill to me.
> You don't need hundreds of terabytes to run an app with test data.
Well you could just mock the data and code, but then the according to the author:
> "Run an individual service against mocks" doesn't count. A mock will rarely behave identically to the real dependency, and the behavior of the individual service will be unrealistic. You need to run the actual system.
What matters here are the odds that the production system will behave the same way as your tests. For functional requirements (not performance), the normal situation is that if you replace your data, those odds do not decrease a lot. If you want to test performance, that changes, and you may need an environment as large as your production one.
The author is suggesting running your code (all of it) in a separate environment, that isn't prod. There is a passing acknowledgment that data exists, but nothing more about it. Very likely, he don't talk about data because bringing all of your data into another environment is indeed not viable for a lot of people, or even legal for some.
If you replace all of your data, it's still your code running there. But you must have some data, or your code won't run, and it must look like real data, or your environment will be fake again... where "look like real data" is completely problem dependent.