I’m planning to build several WiFi connected devices for home automation: an AC remote control and air quality sensors. These devices would send data and be controlled through a local server. I’m considering two approaches: running custom software on a server PC (hardware to be determined) or integrating with Home Assistant’s protocols and purchasing their hardware. Would using Home Assistant be excessive for this use case?


Will do. Is it more for security purposes? Reliability?
Most wi-fi smart devices use cheap components and will often drop off the network for seemingly no reason. As long as you do some basic planning, Zigbee and Z-Wave are pretty solid. There are some folks here who will say one or both of these technologies are on their way out because Matter & Thread. I’m not sure I agree with them, but even so, HA supports Matter, so… when Thread devices become as ubiquitous as Zigbee & Z-Wave devices, you can replace them as they die.
Most WiFi devices these days are cloud-based, at least on the American market.
If you can find a Zigbee or Z-Wave (or the up-and-coming Thread), those only work locally. The only way to get remote control is to expose HomeAssistant (or a similar hub) to the internet - usually using a VPN from your remote devices into your network.
It’s a bit more upfront work, but no one can track your devices, they’re off grid/much harder to hack remotely, etc.