We will always have a way to use Pulumi without the service in the picture. It'll definitely mean loss of some key features that just using the service makes possible -- one thing we prefer over Terraform (things work in a team environment out of the box without needing to manually set up state/lock management) -- but we definitely understand some folks want more control.
@bitter-oil-46081 is working on a FAQ page as this has come up a few times now, and he will reply back with it with more details on how to get this going.