Devices that are meant to be local-use only can use local scope
addresses.
the whole concept of a local-use-only device is somewhat odd.
how can the device manufacturer make assumptions about his customers'
network topology? or about the placement of security threats relative
to that topology?
In addition, to get to an IPv6 node such as a water meter,
you need to get the address right -- the whole 128 bits of it. If a
device uses the "privacy addresses" of IPv6, then the low level 64 bits
are essentially random. Getting to the device by some form of net-scan
can prove to be very long, will plenty of opportunity for the network
police to detect the attack.
the nice thing about "privacy addresses" is that they can be used
when appropriate for a device or application, and avoided when they're
not appropriate. ideally this should happen on a per-application basis.
Keith