I don't ask my users to install Visual Studio, IIS or Windows Server 2012 on their boxes. I kind of think asking them to install SQL Server is similarly foolish - particularly since now you have to pay for 1 SQL server licence per user rather than 1 per organisation.
This is what SQL Express and LocalDB (and SQL Compact for that matter) are designed for. Of course you have to install these sort of database engines for many apps. Even Microsoft does this in their consumer apps.