Hmmm, it sure looks like you're right. The articles I linked to above made it seem like Internet Recovery is an additional option rather than a required route to follow. If nothing else, this explains the size difference required for the Recovery disk (1GB) vs. the Lion download (4GB).
I now have to agree even more with tacit's earlier remark about the available alternatives for a bootable Lion backup disk being unsatisfactory, although I'd call it unbelievably stupid, not to put too fine a point on it. So it appears that a thumb drive is the solution after all, albeit the overly pricey Apple version...
And to conclude this episode, I have to apologize to Grelber, particularly if he figured out this particular limitation. On the positive side of things, that would mean that contrary to his claims he's too smart to throw in the towel.
