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egan, clients used a terminal with no hard drive. All applications ran on the central mainframe and IT departments were the only ones that had to install applications, worry about hackers and viruses were not even invented yet. Now we have the "new" Chromebook which is essentially a terminal with no hard drive to access applications, documents, etc from "the cloud". The more things change the more things stay the same (or revert back to the same!)
The problem with such devices is that you need to have total faith in your service provider - in this case Google. It puts us back in the situation of having a commercial enterprise that, if used by huge numbers of people, becomes too big to fail. Google would also be in the position to offer the service for free to get it rolling then when the amount of critical data reaches a certain point they could change their policies and begin charging more and more - much like the cell phone companies do now and their users would essentially be held hostage to whatever revenue scheme Google (or another cloud service company) would impose.
Another issue is that these new "dumb" laptops could not be used for anything but a door stop if you live or travel into a geographic area that has no internet connection - I mean NO connection - Wifi or cell. Yes, there are actually large areas, at least out here in the West, that have huge dead zones! Although I live less than five miles from the center of a city right on Interstate 5, I cannot get a reliable cell signal in my living room - really frustrating since I'd like to give up my land line. The construction of cell towers has pretty much followed the main interstate freeways and in states with extended rural areas like my native Oregon there are huge expanses within the state where your cell gets no bars at all.
Also, I doubt if Google's rivals would want to provide a service that can be accessed by someone else's hardware device so we get back to the iPad vs. Google Android marketplace issues again.