In this work we develop a theoretical framework for the localization of flow in the steadily flowing regime of sheared disordered solids with inertial dynamics on a microscopic scale. To this aim we perform rheology studies at fixed shear rate on a 3D model of dense disordered solid. Our particle based simulations reveal the existence of heterogeneous shear-profiles in the stationary flow under homogeneous driving conditions. To rationalize this result, we propose a continuum model that couples the dynamics of the local flow to the evolution of a kinetic temperature field. A linear stability analysis of this theory predicts the minimum system size necessary for the flow instability to develop. This prediction as well as the velocity profiles obtained from this continuum model are in good agreement with the results from the particle based simulations.