We are wondering if our bike expectations are unrealistic.In general, yes.
Is long distance touring AND local riding too much to ask of one bike?
But it depends on what you mean by "local riding." If local riding means going to the grocery store or farmers market, then your touring bike will be great. If local riding means a 50-mile club ride, then the touring bike won't do.
It also depends on your standards. If you want a bike that will be "sufficient," then almost any bike can do anything. But if you want a bike that is well-suited to the task, then you need two bikes.
It also depends on how much gear you take on longer tours. The more gear, the more you need a real touring bike.
Besides, two bikes is always better than one.