I agree that using the cloud for rendering any rendering stuff is not as easy as it seem and I'm not really sure if devs will be able to use the cloud for that.
But, one very good use I can see to the cloud (and this is how we are using it our in game); is to keep a persistent world alive. By persistent I mean even for a single player experience; let say Skyrim; all inhabitants have their own agenda and things are supposedly still going on while you are somewhere else on the map.
Now, Skyrim is not really computing everything in the back but simply queue up all action and execute them while loading or moving... Or any other method they can use.
Having 2 or 3 VCPU on Azure computing all of this for the console may actually be very cool and free up the CPU of the console for something else.
This is one example but I think there are plenty of other things that can be done in the cloud to free up the CPU even for a single player game.
For a multiplayer game, obviously the cloud is just replacing a dedicated server
