Yes, I agree.
Having a seperate series of small ai's controlling local vehicles is much more secure than having HAL sat somewhere running the entire road network.
However you need to think about how the ai would work as a series of layers
Layer 1 Controlling the vehicle
Layer 2 Predicting traffic flow
Layer 3 Route planning
Layer 4 Network control
Layers 1-3 would be in the car, layer 4 an external ai that controls things like traffic lights.
Layer 2 would handle a car that needs to change lane because it is leaving the current road network. All the cars around it would vary there speed to allow safe passage.
Layer 4 would talk to ai's and advise them of local traffic problems and this would be an input into layer 3
I think it would work really well, but the possibility of a hacker gaining control of the system is a bit scary.
Having said that, in the last 5 days I have spent about 25 hours on british motorways. I think a hacker would probably be safer than some of the drivers I have just seen.