Earlier quoted context omitted.
You are right in theory and in older times, but these days trying to get a browser to accept a self signed certificate is difficult. Remember that it would need to be done on a multitude of different platforms (eg Safari on iOS, Chrome on Windows) and by regular users. And no one is going to repeat this for the combinatorial explosion of browsers in the home with the devices (fridges, printers, other computers, devic…
I'm not saying it's a great solution. Just that it's not pointless to put a self-signed cert on a device like that. What I'd do as a dev manufacturer? I'd try to change the game entirely. The current system simply did not have devices like that in mind. One idea would be "device certificates" - basically known CAs that can certify MAC addresses. This should be enough for local networks.
Amusingly mac addresses aren't as constant as you'd think. On my home lan I use a netgear wifi range extender. The way it works is to give fake (transformed) mac addresses for devices connected to it. For example if the real mac address is 11:22:33:44:55:66 when connected to the main access point, then when connected to the wifi range extender the rest of the network will see the mac address as aa:bb:cc:44:55:66. (The range extender also has ethernet ports - this affects wired and wireless connections to it.)