Question

void foo() {
  struct Foo { .. };
  std::vector<Foo> vec; // why is this illegal?
}

I’m not returning Foo to the outside world. It’s just a temporary type that I use within the function.

Answer 1

A local class can’t be a template argument. Because the standard says:-

14.3.1 paragraph 2:
“A local type, a type with no linkage, an unnamed type or a type
compounded from any of these types shall not be used as a
template argument for a template type parameter.”

[Example:
template <class T> class X { /* ... */ };
void f()
{
struct S { /* ... */ };
X<S> x3; // error: local type used as templateargument
X<S*> x4; // error: pointer to local type used as templateargument
}
-end example] [Note: a template type argument may be an incomplete
type (3.9). ]"

One workaround is suggested here on c.l.c++.moderated.

UPDATE:
There was some discussion on why is it not possible to have local-classes as template arguments? The links here and here on c.std.c++ discuss the same.