Can restaurants survive on locally sourced ingredients? [Moved from Boston Board]

Looking for understanding here... I was at a dinner party in the Boston area over the weekend and conversing with another guest, a chef/restaurant business consultant. While discussing the chance for success for a new, upscale restaurant in our community, I suggested that people in our town would be more likely to patronize the restaurant if they knew that the chef/owner were sourcing his produce as much as possible from our local farmers' market and CSA, or at least from our region. The response from the expert was astonishing, to say the least. He was furious and expounded on my "naivete" in expecting restaurants to survive financially if they were limited to buying produce from local sources.

Is the Buy Local movement, unbeknownst to me, a political hot button in the restaurant business? Now that the movement is hitting the mainstream, does it indeed threaten in any serious way how business has been done?

Please no flames! I'm still scorched.

Thanks.