[RFC] "needs update" considered harmful

The previous two variants both aim to reword the somewhat unpopular "needs
update" message to easier "locally modified".

"Politically correct" thing to do would be to keep the output from the
update-index (plumbing) intact and update only output from "reset" and
"add --refresh -v" which are Porcelain.  This has smaller chance of
breaking people's existing scripts, but some people may find the two
messages that say the same thing inconsistent.

Rewording to "locally modified" even at the plumbing level is a simpler
patch, keeps the API to refresh_index() intact, and probably is a better
approach in the longer term, especially if we can ignore people's existing
scripts.