For a business standpoint the Cloud (as in Cloud Computing) makes a lot of sense if you provide web based services. You might get very high peaks at release times then it settles to say 10% of the spike capacity.
The alternative would be to purchase those servers and backbone infrastructure that can deal with the peak and then you have 90% of your assets just sitting idle. Later when you need to upgrade you have to upgrade them all, so renting computing from AWS, Google, Terramak, Azure, RackSpace, etc (about 10 mayor ones with over $1 Billion revenues per year which you know they are not going to disappear under your feet) at pretty competitive prices.
For home use, it's silly because a virtual cloud computer with virtual GPUs streaming data to your Ethernet enabled TV with keyboard and mouse will cost you more than a dedicated system at home if you use it often.
Then again Google for example only charges per usage so if you use the system rarely you always have an up to date system accessible from any H.264 decoding networked appliance. But of course you can't use it to program your dev kits.
As for connectivity, being close to the backbone gives you fast access to the internet, so as long as you can stream to your PC with lowish latency then it's transparent.
There are also benefits when you expose your works to outsourcing, because they can work on your project but they really don't have access to the data, they can only manipulate it to do their tasks.
And of course there are more benefits, but this is just a first glance.
It's always been a cycle between mainframes and desktops (remember x windows terminals) now we are getting to a centralize cycle since the Cloud computing resources will become cheaper than owning your own similar system with processing on demand. Later desktops will find some innovation that will make them king again.
So there is a place for the Cloud, maybe not for most yet but it might in the near future before it all flips back to desktops and home computers being cheaper.
My feeling is that we are getting into a commodity cycle, you need 100 virtual Quadro cards on your virtual computer for 1 hour? so be it, only pay for that hour and then you are back to a more trivial system, all on demand.
With the money involved surely there is demand for it.