It is way too soon to tell.
Distributed computing has been done successfully in the past, it just can't be done with certain aspects of gaming. However it can be done.
To successfully take advantage of distributed computing, the console or the application/game would need to measure the latency. If the latency of the connection is within a given tolerance, then it could use it for those applications where it is suitable.
What this also does is put the onus on broadband providers to reduce latency and increase network efficiency. One immediate way, would be providing a back-end channel that allows a direct communication with the broadband provider and Microsoft's own data center. This would mean Microsoft uses multiple back-ends to the Internet, and those back-end providers offer a single hop to each of those data centers. To go to Microsoft.com, which requires going through AT&T to get to them, I hit a wall in Chicago with 200ms+ with my current connection, then bad hardware in Minneapolis, Minnesota where every attempt beyond that point is met with either high latency times or dropped connections. If connections are routed directly based on connection proximity to local data centers, which Microsoft has in Chicago, than that latency is significantly reduced. For instance, right now my latency would be under 30ms, within the time frame to do just-in-time calculations.
But that only solves one aspect of latency. The other, bigger problem is the number of hops from the consumer to Internet. For some connections, the number of hops and the amount of latency between those hops is ridiculous. The connection I am currently on is less than 25ms per hop to the service provider, however another connection I use through AT&T sees multiple hops with a latency of 600ms + That's almost a second of wait time just for one tiny packet. One bad router can slow the works down to a crawl, and often an broadband service provider/network backbone provider, won't change out equipment until a higher failure rate occurs across the device. Granted, they can shut-off ports, but for them a slow port is better than no port.
So, yes. The current usefulness of distributed computing is low, it isn't entirely useless. It can be used in those instances where tasks are low latency. However, network performance will also be extremely important. Knowing what your current latency is between you and your network provider, and you and the destination (a little harder to do with Microsoft) would go a long way to determining how useful it would be for a particular individual. Implying that it is useless for everyone, everywhere is not correct. The closer you are to a Microsoft data center, the fewer hops you have to get to the Internet from your home, and the fewer the hops your connection takes to get to that data center, the better your chances are of it working well for you.
As with the power of computing, I think as we progress into the future the power of distributed computing will increase, making it more viable for distributed computation. It will never replace the console itself. Just like it can't replace the PC. But it can provide additional computational power and I think in time it will.
The only question is Microsoft trying to do something well before it can be reasonably achieved in the real world? I think like a broadband only online service in 2002, it is a risk but not impossible. The majority of homes in 2002 used dial-up Internet. Roughly 10% at the time had broadband Internet, fewer still 1Mbps or higher download transfer speeds.
Worst comes to worse, Microsoft has 300,000 servers available for either gaming, it's cloud-based services (Azure) or it's more traditional Internet-based services (messaging/e-mail).
to go to Microsoft.com, which requires going through AT&T to get to them, I hit a wall in Chicago with 200ms+, then bad hardware in Minneapolis, Minnesota where every attempt beyond that point is met with either high latency times or dropped connections.







