The big problem with running unencrypted HTTP on a LAN is that it's terribly easy for (most) LANs to be compromised.
Let's start with the obvious; wifi. If you're visiting a company and ask the receptionist for the wifi password you'll likely get it.
Next are eternity ports. Sitting waiting in a meeting room, plug your laptop into the ethernet port and you're in.
And of course it's not just hardware, any software running on any machine makes the LAN just as vulnerable.
Sure, you can design a LAN to be secure. You can make sure there's no way to get onto it. But the -developer- and -network maintainer- are 2 different guys, or more likely different departments. As a developer are you convinced the LAN will be as secure in 10 years as it is today? 5 years? 1 year after that new intern arrives and takes over maintainence 6 weeks in?
What starts out as "minimal private VPC" grows, changes, is fluid. Treating it as secure today is one thing. Trusting it to remain secure 10 years from now is another.
In 99.9% of cases your LAN traffic should be secure. This us the message -developers- need to hear. Don't rely on some other department to secure your system. Do it yourself.