Theater Sever Side

Can someone explain to why they have Theater set up over a server and not locally saved wise. Im generally confused why its like this? Theater is just a mess if saved over server side. nothing matches in your shots/ throws ect. Is it a storage problem for xboxs? or why not only have last 5 or so films save for locally view after that it deletes?
Halo 3/ Reach works fine everything looks crisp and is saved locally not to a server where it can be 200ms if not over a second off in film.
Im genuinely interested why its done this way

My assumption is saving it via server saves space on your SSD/Hard Drive and thus makes overall file size smaller.

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True but like I said couldn’t they just reduce the amount of films temporary saved to your storage? Like 3 or 5 films and then I’ve you want to permanently save it you can.

Just I can’t trust theatre for let’s say a shot I positive I hit then in theatre it doesn’t even show anywhere near close because of it been sever side.

In one theatre review I was facing backwards shot through my -Yoink!- and got a headshot even tho the shot in theatre is prob close to 10 metres off. It’s horrible.