In normal IT operations, this is the right choice and why VLAN’s are so popular in business and data centers.
The challenges with smart home devices is threefold:
Dodgy products you may not trust in the first place - the best solution would be to not use them. Even if the alternatives are not perfect substitutes.
Complex interactions - As mentioned, it is not obvious which devices “phone home”, which devices need legitimate inbound or outbound Internet access, or which groups of devices must interact with each.
The common usage mode is the worst exception - this is where segmentation falls short in smart home implementations. Every client device (iPhone, iPad, Desktop) often needs to communicate with every IOT device (light dimmer, door sensor, smart speaker, hub or bridge, etc.) to be useful or used as intended/desired.
This any-to-any communication makes segmentation much more challenging.
Realistic implementations have many exceptions that need to be put into place.
e.g. Put all the Wi-Fi dimmers into their own segment. But make an exception that allows every iPhone in the home to talk to all of them.
Want to stream music to the HomePods? Well, are they HomeKit Hubs in the IOT segment, or are they peer devices to all the iPhones and iPads in the user devices segment?
Want to have a local video or music library on a Plex Server or Synology NAS?
You quickly need to manage firewall rules, VLAN exceptions, and poke holes through the ideal “pure” segmentation model such that it looks like Swiss cheese when you are done.
And then add the layer of complexity of inbound versus outbound. Maybe it’s ok for your smart plugs to reach out to the Internet to check for firmware updates, but you don’t want to all inbound connections that aren’t in response to those initiated outbound ones?
I’m not saying it can’t be done, and work. Just be prepared to learn more than you may want and to become a unwilling IT support person.
The first time your spouse or family member has trouble streaming music, watching YouTube, or just surfing the web, they really don’t have the patience to hear about firewall rules, DNS settings, tunnels, and other jargon - they just want their MTV.
If you want to segment and master VLANs, also be aware that most consumer network equipment either doesn’t do it very well, or not at all. You’ll need to upgrade to prosumer level products.
And no, just creating separate SSID’s for your IOT versus your regular devices is not really segmentation. You can’t simply use the GUEST network of your ISP Internet box to do this properly and securely.