That's pretty much what I was going to say, too, Jim. As I said before (and I really don't want to waste anybody's time arguing over something like this), we've been here before, more than once. As I recall, IBM wanted RMX (a real-time, multitasking operating system) on the IBM PC, but the owners believed the mainframe model was the only way the computer industry lived. Windows 95 integrated Internet Explorer not to kill Netscape, but because "the desktop is the web" (or somesuch nonsense). DEC studiosly avoided the PC revolution. Sun wanted their Java processors creating their own cloud.
When I look at how this has progressed, I don't see a smooth motion "forward," I see a pendulum that swings every fifteen years or so, and we've proably reached the limit this time through. Microsoft's Kin, for example, looks like it's trying to push you OFF the cloud, not on. A lot of people are interested in Diaspora, and want to run their own "node" in a social network. And nobody has developed a "killer app" that makes "the cloud" something that real people care about--it's just storage and communications, and you can carry that in your pocket.
To clarify what I meant about "the desktop will go on," I'm looking at hardware like those "wall wart" computers (Marvell), the netbooks (Asus, et al--I've been using one as my main machine for over a year, now), and the "net top" machines. They're dirt cheap, plug into your television, and have more than enough power (and, with a USB stick, storage space) to run Linux, Chromium, or a ReactOS-like Windows clone, plus office software and desktop publishing, audio, image, and video processing, various communications software (web browsers, VoIP phones, etc.), and so forth, all for free. And that hardware isn't going to vanish or skyrocket in price. In fact, with all the money going into so-called SoC ("System on a Chip") research, it looks like we'll have more opportunities, not less.
(And Jim, I'm with you on storage. A 1.5TB drive just appeared on my doorstep this afternoon, by coincidence, like magic. Well under a hundred bucks, too, though I need to scavenge for a cable to make it go.)