Not really. We need a way to create ad-hoc phone-to-phone physical networks, not virtual ones that still go through the Internet. Though even just going through LAN would be an improvement. Bluetooth could technically do this, but as it is, it seems to suck.
I'm pretty sure most smart vibrators do use Bluetooth for the last mile. The "smart" part comes from integration with IRC bots or live streaming sites so that others can control the device from across the ocean (across the Internet).
