There are a lot of other things beside the fuel costs that mitigate against this, such as the first cost of a diesel or other IC generator,plus ancillary bits.
A generator that can handle most household uses 24/7 will be a fairly specialised device, hence will be expensive.
Fuel tanks need to meet Govt specifications, so will also be costly.
Add to that pollution laws, & the fact that Local Government Authorities would be very unlikely to permit such an installation, in the first place.
I don't buy that for a second. If it were economical to generate power that way then everyone would have one, they would be mass produced in huge quantities and costs would drop. As it is you can get generators really cheap these days, most of my neighbors have them and I hate the cheap ones, power goes out and within 10 minutes I can't hear myself think over the din. The nice quiet inverter generators are much better but even so it's easy to work out the cost per kWh and it's not even close to competitive with what I get from the utility. Just for fun let's run some simple numbers here based on the Honda EU2000i I occasionally borrow from a friend. This is a high end inverter generator about as efficient as they come.
Fuel capacity is 0.95 US gallons of gas (petrol) and that is rated to run 3.4 hours at rated load of 2kW so 6.8 kWh per tank or 7.2 kWh per gallon.
Gasoline prices fluctuate frequently but currently in my area regular is about $2.91/gallon, so that means electricity generated by burning gasoline is about $0.40/kWh, ignoring the additional cost of collecting and transporting the fuel to my home. Electricity from the utility costs me a bit less than $0.09 per kWh so less than 1/4th the cost of generating it myself.
I think it's reasonable to assume that a really efficient diesel generator could perhaps double the fuel economy, resulting in a modest savings even factoring in the higher cost per gallon of diesel but still substantially more expensive than utility power.
My point was that it wasn't a reasonable comparison.
Your little Honda generator, or any other economically priced generator would not work 24/7 to replace the convenience of Mains power.
Something which really did the job is going to inevitably be larger & more of an industrial unit.
Nobody is going to make a special one just for those few nutters who want to supply their own power.
Ironically, someone living in a remote area would probably find such a setup useful to charge their electric car!
I.C. cars already exist in their thousands, & as long as people can find fuel, will continue in use.
It works the other way, too .
The enthusiasts for electric cars, wave away real concerns, with "you will just have to adapt", or "you can have another long distance car", or "you can hire a car", or "sleep over at your destination" & so on.
People have real financial reasons for not doing these things.
Nobody is saying that everyone is going to have to get an electric car or that it makes financial sense for everyone, or is convenient for everyone and that's fine. If everyone had them then we would have another set of problems but that doesn't mean there are not benefits to having a lot more of them than we do currently. It also doesn't mean that a lot of people could not easily adapt and make very minor lifestyle adjustments. I've lived long enough to see multiple waves of new technologies where each time older people bitched and moaned about how terrible they were and how they wouldn't work and this or that just wasn't possible, only to see people quickly adapt. While it's hard to believe, there are actually still numerous people who cling to incandescent light bulbs and find all manner of excuses why modern replacements are not suitable despite the fact that I've somehow got by without using incandescent lamps for general illumination for more than 20 years. People swear CFL and more recently LED bulbs are not any cheaper to run despite the fact that basic arithmetic plainly shows otherwise. It's simply a resistance to change and an emotional belief that anything new or "green" is some kind of liberal commie conspiracy or something.
There were a lot of technologies that didn't make it into the mainstream, & among those that did make it, some had a pretty rocky road.
CFLs were pretty useless, they do not produce the same amount of light in the spectrum which is useful to human eyes as incandescents do, their life span was nearly as poor, & the better quality ones, which were still cruddy, were quite expensive.
Tube fluorescents are much better in every way, but of course, require new wiring.
The current crop of LED bulbs are a
very good replacement for incandescents------the early ones were lousy,though!
Now as much as I love my older cars, it's just a simple fact that humans are going to have to adjust and adapt at some point because the current model of extracting oil from the earth and burning it to drive around in hundreds of millions of individual cars is not sustainable. Sooner or later oil will be scarce enough that we will have to find other options, whether that is alternative energy sources or much greater reliance on mass transit. We're on track to have 10 Billion people soon and more and more of those people are wanting modern conveniences.