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kowenicki said:
...

2. I accept that, but if I am a subscriber to onlive (£6.99 per month) and a game that is on both PS3 and Onlive becomes available, then it is essentially free via Onlive versus £40 to buy the game...

I see it as replacing renting, or Gamefly like services. If you like a game and plan to play it for an extended time, you'd buy it.

If you have enough money to afford a PS3, Plus and OnLive every month, £40 for a game you like won't be too much.