The simpler solution is to just remotely set off an alarm. I do this frequently with the "Where is my Android" thing. Internet-enabled devices should include this capability by default, anything more is just over-engineered.

Not supported by all devices. It's unlikely it's easier to get everyone to agree to support this feature than a firmware update to wireless access points (which might even be open source depending on the hardware specd) to support time of flight ranging. If you can ship it, ship it. Don't wait on someone else.

Unless I'm missing something your assuming multiple (3 minimum access points, having worked on a similar project our accuracy required more to make up for inconsistencies and multi-level facilities) at home (where I get away with just a single one) and that they have been calibrated to know where they are in relation to each other.

Yes, I am assuming that is more likely than convincing manufacturers to support alert functionality natively. Considering the rise of wifi repeaters (Google, Eero, Netgear, ec) and other IoT devices, I don't believe my assumption is far fetched. Consumers have smoke detectors, cameras, garage door controllers, and water sprinklers on their wifi now.

You could make a simple 3-part product that does just that. You place them in various parts of your house, they calibrate together (play an inaudible sound and measure delay), and then have them manufacture traffic to your target device to figure out where it is.

I imagine they could be somewhat close together (e.g. same room), which makes setup way easy.

I can't imagine it would be very difficult to make, provided small Wi-Fi capable devices are sufficient, it just needs some work on the details.