Yea! In my opinion, the biggest reason to use localStorage is if you want some kind of persistence for a particular user between sessions. Otherwise, temp state integrates a little better with your Retool app, being able to use setIn is a great example of that, you can also use the UI of certain event handlers to set temp state values, etc.
I agree with @ScottR that temp state seems like a good way to go here 
do you have any particular wants with respect to how you're storing your data for manipulation?