My 2 cents--just like I'm not really interested in seeing dub actors, I'm not really interested in seeing local bands, although I totally get that there are people who may want it. I always make an effort to go see all the Japanese bands you guys get to play every year even when they're not a genre I'm particularly into because I know the amount of work it takes to get somebody from overseas, and I appreciate the rare opportunity to get to see bands I wouldn't otherwise without going to Japan. It's one of the big highlights of Fanime for me, so I'd be pretty disappointed if you went for local cover bands instead. If it's a numbers thing, I'd much rather see one or two artists from Japan instead of a bunch of local bands. And I agree with all of Ecchi ja Nai's comments/alternatives!
I agree 100%! The Japanese bands are the only reason why I make it a point to return to Fanime year after year. After 2013 Line Con I had sworn off Fanime but then reversed my decision for one reason only, which was the announcement of Home Made Kazoku (well, two reasons--them, and fixing reg.)
I'd be fine with an western J-influenced band AS AN OPENER as long as they were top notch. Lemon Drop Kick is a great example! But we don't need the bands that make the rounds at all local conventions (i.e. Akai Sky)
Alternately, I wouldn't mind seeing some indie J-Pop/J-Rock bands from Japan. It's great to see big name acts, but even if they aren't big name, it's still worth going to see a style that's hard to find in the US.
While I too would like to see the return of a two act MusicFest, I understand that's not always possible, and I'll gladly take one amazing band over none.