Comment 5 for bug 398923

disabling localhost would also disable ssh tunnels, which would make vinagre completely useless for those that admin remote systems. This could be overriden with the "use host" option, as long as it remains fixed (it has been broken in the last 2 releases).

if it's possible to detect when the remote connect is to itself, this would fix the "problem" properly, but that would be have to be part of the vnc protocol itself.