I read this interesting article about Windows Vista. Vista may well be more significant than the author realizes. It may well be the greatest piece of shrink wrapped software ever produced, and perhaps the final hurrah for shrink wrapped software.
For years people have talked about moving applications online. Proponents of on-demand applications tried to argue that they would win out for a variety of reasons, such as portability, ease of maintenance, lower cost, etc. The truth is that maybe they will win out just because it will become too hard to do things any other way.
It still probably seems absurd to suggest that it is easier to write something like MS Word or Adobe Photoshop as a web application than as a desktop application, but the initial creation of the software is only part of the cost. The history of Windows may prove prophetic for other desktop applications. They grow and grow, and have all kinds of "baggage" (working with other apps, backwards compatibility, OS compatibility, etc.) Perhaps this weight is even worse for an OS, especially one that offers so many integrated applications with it. But maybe it will prove to be true for lots of other software too.
So why are web applications any different? For one, there is no such thing as backwards compatibility. There is no such thing as "upgrade" for a web application. Thus you never have to support multiple versions and worry about upgrade rates. The use of web standards also makes many of the other issues easier to deal with. Releases can be much smaller, and incremental for a web application, and thus also more frequent.
All of these things may make desktop applications, especially complex ones, just too expensive to build and maintain. It may only make sense to do them online. Desktops may become the realm of small, simpler applications that don't change much (think notepad.)