Yes, it is an issue. I just added in state shipping and it automatically goes to the bottom of the shipping options list. Most orders are free pickup and are listed first. I have signs everywhere to select the in state shipping option but many assume since they selected shippable products the in state shipping option is automatic.
I end up creating a discount code so they can place the order again and only be charged the shipping fee. It seems nobody reads so I would probably end up refunding shipping fees if it was at the top. A way to associate certain products with a shipping option would be nice.