Android 4.0.1 breaks WebView HTML 5 local storage?

Via some discussion with a Google engineer it seems that they’ve made the decision that the file:// scheme is insecure.

A work around for this is to do the following

browser.loadDataWithBaseURL("http://www.example.com", 
            htmlContent, 
            "text/html", 
            "utf-8", 
            null);