Chris, I'm sorry to disappoint you, but they're not likely to come back.
It wasn't just an issue of dumbing down, although it's had a minimal impact because very few people understood it. During the whole of the beta period, I only remember one thread on the subject, and it wasn't that long.
Picks/Rejects have become a primary method of refining image sets since it was originally implemented, and LR's local flags ruled out any possibility of cross-program compatibility. With them now globalized, future compatibility with other software such as Bridge, Photo Mechanic, Photosmith, etc., becomes a possibility.
The good news is it's not a data loss situation. If you right-click on any collection that previously had local flags, you'll be able to select them again, and use another rating system.
I know it's tough to have to change your workflow. Rather than adding to the collection and then flagging, you could flag in the folder, and then save their picks and their maybes as collections, before resetting the folder flags ready for the next person. No need to go into separate catalogs.
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