I don't think you understand the question:
What part of the locating process requires the signal to originate in space?
Answer:
No part of the locating process requires that the signal originates in space.
Maybe if you're
not talking about the currently-used
global-positioning systems, including GPS, which is what we're discussing.
All you need is a transmitter that knows where it is and has an accurate clock which can transmit this information, and a receiver that can decode this info and compare with its own regular clock.
Really? "All you need is a transmitter that knows where it is" Well, easy-peasy, then! Duh!
Oh... how does this work in the middle of the ocean ("Global", remember?) Are you proposing a large network of buoys, or ships, or continuously flying high-altitude aircraft, or some combination? How do the buoys, ships, or aircraft know where they are? Other buoys, ships, or aircraft? See the problem yet? Buoys need service; aircraft have to land every now and then; a ship needs a port call periodically. How many of these things are there? A handful of satellites solve this problem neatly.
How accurate is the receiver's "regular clock"? Hint: a real-world GPS receiver's clock doesn't need to be particularly accurate long-term; it helps speed acquisition after being switched off if it's reasonably accurate (how long it takes to re-acquire position depends in part on how long it's been, how accurate that clock is, and whether or not you've moved a long distance while it was off), but it isn't essential for determination of position once a fix is acquired - it may just take longer to acquire the initial fix after a long period. This sort of stuff sounds good if you're waving your hands; in reality it's a tad more difficult.
Even if the receiver's clock were perfectly accurate, how would you determine altitude with any accuracy of all the transmitters were at about the same very low elevation angle in the presence of even a small amount of measurement error?
Good Lord, you RE'ers are dense.
Sorry. To meet the system specs for coverage, altitude resolution, and reliability, satellites are necessary.
Well, we were discussing the GPS system. The currently operating one, by the way. Some hypothetical perfect system
may be able to operate, if you can afford and are able to install all the ground stations, and keep them running properly.
In short: it sounds easy to hypothetically replicate all of the GPS system's capabilities with terrestrial stations. Like most hypothetical situations, they're way oversimplified. Nice try, though. Unfortunately, too limited and impractical.