Yes, pretty much. It was made obsolete when network hardware vendors like Cisco started adding Appletalk support to their routers. Those were cheaper than a Mac II with a stack of Nubus Ethernet cards and this software.

BTW, here is Apple's instructions for using the Localtalk Bridge control panel: https://support.apple.com/kb/TA33531?locale=en_US&viewlocale=en_US

Looks like Appletalk needs to be set to "Ethernet" in order for Localtalk Bridge to work.