The UL requires a switch to be able to physically break the connection in a way that can't be actuated remotely. So the switch will need an additional physical cutoff switch. Which is funny, but workable.
The deal killer is the power dissipation requirement. A solenoid, both compact and powerful enough to actuate the paddle, will dissipate too much power if it gets stuck in the "on" state. And a small geared motor is not acceptable because the switch has to be bi-stable and can't be allowed to get stuck in the middle.
So if you do an integrated device, the paddle will just end up being an input device, rather than an actual current-interrupting component. And there just isn't a lot of space inside a switch for everything without going into Apple-like engineering.
But that would be fine. The biggest problem is not whether a relay in the switch would fail or not, it's that you want the wall switch position to be tactile and to reflect the state of the switch.
Yes, it might be possible, but also expensive. But there just isn't a lot of space available to support both a good tactile feedback, and to be able to interrupt the line voltage. There are requirements for high-low voltage separation that are difficult to meet, while staying within the allowed size for a switch.
Since I'm doing it for myself, I will selfishly just do a low-voltage system :) But I'm seriously considering funding a startup to do engineering for an integrated version.
The closest thing that I found to a _good_ smart dimmer was https://www.alibaba.com/product-detail/Zwave-Zks31-Knob-Dimm... (ZKS-31). It has a physical knob as a control, and it only misses the visual indication of the current state and simulated detents.
I'm really at a loss why nobody else is trying to do something like this, while doing crap like touch-sensitive switches with LED displays.
The deal killer is the power dissipation requirement. A solenoid, both compact and powerful enough to actuate the paddle, will dissipate too much power if it gets stuck in the "on" state. And a small geared motor is not acceptable because the switch has to be bi-stable and can't be allowed to get stuck in the middle.
So if you do an integrated device, the paddle will just end up being an input device, rather than an actual current-interrupting component. And there just isn't a lot of space inside a switch for everything without going into Apple-like engineering.