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Not sure if this was intended to work this way, but we are attempting to develop an app that runs locally on the browser and makes use of local storage. The exact same app when run from a server retains the data between sessions as expected. When run on the same browser (Firefox) and initiated locally, the data is not retained between sessions.
The behavior of localStorage for situations where there is no useful origin (such as file:// URIs) is not defined by the spec. That said, what you're seeing doesn't sound like particularly intended behavior in Firefox; can you please file a Gecko bug?
This sounds like an issue either with the browser or with the file:// protocol spec, if any, not the Web Storage spec.