Web based/cloud computing is not just limited to running apps on remote servers. There's nothing preventing an app having a cached local copy of its program, data and services, and using that for performance, and accessing the cloud when its not cached, to update itself etc. In fact .NET contains these mechanisms today. At work we have intranet apps deployed using ClickOnce that run locally, but if there's a new version it gets downloaded and installed locally automatically.
I think the scenario you're describing here is more a mixture of Thin Client or Client/Server, network update services, and remote backup applications than what most "cloud" providers are envisioning. There's nothing new with that. Citrix and others have been providing services like those for years.
But if you're dependent on a server to push an application or data down to a local PC, you still have a single point of failure regardless of whether your apps and data are cached locally or not. It also presumes the presence of electrical power to the client machine if the caching is done to RAM rather than to disk. Which may be fine if a only a single building or city block has been blacked out. It's becomes a bigger problem when there's a full-bore regional power outage that not only takes out your PC, but also your company data center located 500 miles away - along with all the network routers in between!
If my network is down when I come into work, I can still use Excel or Word if they're installed on my hard drive. But if I'm running something like Citrix, or a web app suite, I can't do much of anything other than boot up. And if I'm running a pure thin client, I can't even do that. In short - no server or network connection - no party.
And that's where the problem lies.
The whole idea, and driving force, behind cloud computing and web applications is that they will eventually replace
the desktop rather than augment it.
Software companies, much like the movie and music business, want to get out of issuing hard media and do everything via networks. Networks they
own and control. And once that infrastructure gets adopted, the era of personal computing will come to an end. Unfortunately, much of the flexibility and choices we seem to take for granted in our computing environment will go out the door with it. Information will become just one more regulated utility, no different than water, gas, or electricity..
And we all know how well utilities have fostered technical innovation. Like Henry Ford said, you can get it in any color so long as it's black. **For Extra Credit:
Do you know why the Model-T Ford was only manufactured with a black finish?
The answer had absolutely nothing to do with what was best for the customer - and everything to do with what worked best for the Ford Motor Company. Look it up if you don't believe!