Either way, you're still off.
What I meant by "targeted localized content" was content available only to those in such a region.
For example, the DS Download stations. They only have a range of B wireless and the demo titles available for download vary from station to station.
Now, implement that based on IP (seeing as the DSi has an integrated wireless) and you can have content available to an entire IP block which is more-or-less divided up geographically.
That way, you can have game demos available in Los Angeles that are different than the ones in New York.
Now instead of demos, make them full blown interactive games available only for download in said city and for a limited time, that would guide you on a city-wide egg hunt with many other people participating.
When implemented like this is when I would say "region locked isn't a bad thing".
Otherwise it's just like every other DRM. Just detracting from the experience, not adding to it.