The line losses are a NIMBY problem, people don't want power plants near their houses.
That's not really true. Coal-fired power plants need to be located near a large, reliable water source for cooling and the closer they are to their fuel source the less energy is used to transport the coal. They also have to be of a certain size in order to operate efficiently. Hence even if everyone was willing to tolerate a coal fired power station in their neighbourhood most locations would be unsuitable for their construction, rural communities would be too small to warrant a power station even if suitable and even then there would be an increase in the energy to ship the coal the larger distances required. This means that only small reductions in transmission losses would be possible and since this is already one of the most efficient steps in the power consumption process you'd lose a lot more than you would gain.