Let's ignore the whole latency issue and pretend that that is acceptible. At that point, it's the VDI or App presentation model, but with a workload that requires special equipment (GPU) that doesn't allow for resource sharing on that particular piece of equipment. That puts it in a realm even worse than VDI, and regardless of what you may hear, no one is ever implementing VDI for cost savings. Sure, you only have to deal with peak load, but the gear a lot more expensive than home systems.
Now let's talk processing, delivery, etc.
The netflix analogy really doesn't fly. Netflix is purely a bandwidth problem. Given enough bandwidth, and even marginal latency, you can watch a movie.
Remote gaming is much more involved. You have rendering, *then* you have to be able to encode the video. Only at that point can you send it (all Netflix videos are pre-encoded for minimum bandwidth needed). Once the data is there, the remote system has to decode it, display it, and only then can a player act upon it. I've seen onlive before, and the visual fidelity was pretty much garbage in order to be able to encode fast enough to keep latency low enough that it didn't totally destroy the experience.
Now, the speed of light isn't going to change, but the encoding time will, over time, drop. The decoding time will as well, though they'll never be 0. While there is room for improvement, there is no magic sauce that will remove the latency entirely, and as we're trending towards (slowly) higher resolution displays, the encoding improvements may or may not be entirely offset by having to drive higher expected resolutions.
Netflix is easy. Pre-encode in the most efficient but reasonable to decode format, and add enough bandwith. That just doesn't translate in to an interactive medium.
If everybody on the planet knew how to make it happen then it would have already happened. There is a reason Netflix came into existence instead of hundreds of simultaneous business -netflix knew what to do at the right time for the technology.
I don't claim to know any of the answers, but I am pretty sure that if this were 1980 there would be no shortage of people saying the idea of streaming movies was impossible because the bandwidth necessary would exceed that of all the global governments combined at the time.
Sure we can say now, looking back, that netflix is possible because bandwidth was the answer. But it wasn't us that made that bandwidth possible, it was thousands of much smarter engineers who created the mathematics that were necessary for the protocols and the technology that has come into existence to make that bandwidth possible in the first place.
It doesn't surprise me that we can all come up with reasons why cloud gaming is currently not a reality...none of us are likely to be in any of the meeting rooms, rubbing elbows with the people who are busy creating whatever it is that we will all be buying for $100/month in 20yrs time.
I have a lot of confidence in those guys. They've done some wonderfully impossible things in my time.
