In a recent column in PC Mag, An Ode to Shrink Wrapped Software, John Dvorak talks about the ten weaknesses of online apps. It really comes down to this: "Using the Internet to return to the old model of mainframe computing is a misuse of resources and a dead end."
Everything else he says just comes back to either the model sucks or the security / reliability stinks. His argument is really about Control. He makes it sound like when you buy the latest version of Microsoft anything, you own it or have any control over it. It has as many security flaws as using an open, unsecured PC at an Internet cafe and leaving it for a potty break.