Why Can I Not Access My Devices Localhost Over Data? While experimenting with the Bit Web Server app I have noticed that when I attempt to access my device's localhost, the connection seems to be sent somewhere else.

Using the localhost button in the app sends me to http://localhost:8080, however this displays a blank page, whilst removing the port number takes me to a page that has the following written on it:  Bytemobile Dummy Web Server.

When accessing http://localhost:8080 with no connection (WiFi and Data are turned off) I simply get Unable to connect to the proxy server.
I can however connect to my device's localhost fine when connected to WiFi.

Why can I not connect to my device's localhost? Surely it should not need a connection for it to connect to itself. Why does it only work when WiFi is enabled and how do I change this behavior?
The clue is in the error message, which says it can't connect to the proxy server. If your device is configured to use a web proxy, then it'll never connect directly to localhost: it connects to the web proxy and asks that for the web page you really want. This won't work with a local web server.

To use a local web server, turn off your web proxy settings. See this related question for more info about that.