Indeed it's still a bit basic, but the basis is there. Also of note, the service doesn't utilize more than 5mbit/s of your connection, even if your connection is capable of much more. So even if there's some lag now, there is alot of room left to go.
Also i wouldn't be suprised if one of the big three(or five if we count Apple and Google) will start developing a identical service, or maybe even buy OnLive. Sony has already showed interest in DD with the PSP Go.
And i don't get the whole ''no physical copy'' thing. You don't own one with Xbox Live Arcade games either, or PSN games, or playing classics on NIntendo's virtual console. If you're console breaks you can just download it again later. Only difference is here you don't have to download and install the game first.
