A game isn't just a game engine. In fact, what a game server runs isn't the same game engine as the player. The server has no need for graphics or textures. The only thing it is concerned with is where Player X is and where Player Y is. Likewise, it needs to know where you're aiming, and when you're shooting. That's it.
Everything else, textures, and campaign scenarios area all local. You feed the server coordinates in X,Y,Z and it sends you coordinate information as for player characters and non-player characters.
How a single player game can benefit from remote processing is; AI, and massive player environments. With AI, you could take the route of Turn10 and basically create bot AI players based on your friends. So you can have a single-player experience with your friends competing against you. The AI adopts the playing strategy of your friends. This creates a more realistic and less predictable AI. But even consider a game where you don't have that. Western RPGs are notorious for having big stories and lots of NPCs with their own histories, stories, and assignable quests.
Right now, if you play a game and a NPC approaches you with this urgent task that has to happen right away, you can take as long as you want to take up that quest and respond. In part this was because consoles didn't have the processing power to run the AI in it's own process and take into account all those NPCs. You might be able to deal with one or two, but usually local NPCs needed that process to run. While this generation has a lot more power for AIs to run in, the fact is you can still build bigger worlds.
Imagine a game in which you as a space traveler visit multiple planets. These planets each have their own AI. Not just individuals, but cities, and even creatures that populate the planet. So this AI runs in the background on the server, and when you come to visit that planet everything that has been happening on that planet since your last visit is updated in real-time for you. So let's say the planet you visited was a proto-planet with life just forming, and you smushed a particular bug. Well, maybe life doesn't quite evolve the way it was supposed to. Or maybe you were supposed to do something to help someone the last time you visited, but you put it off thinking, hey this isn't that important to deal with right now. I need to do this other thing first. Unfortunately, by the time you return, bad things have happened because you didn't do that one little thing.
Finally, remote processing would allow developers to build bigger worlds. This doesn't mean the online and offline game world would be any different in size, it just means all the calculations necessary to build the landscape can be done remotely and sent to the console as you approach. That way, by offloading the processing, the console has to do less world to deliver the same experience.
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