Nope!
There still a need for storage, networking, USB ports, hook up for VR Headset and Kinect, etc. It's components like rams, CPU & GPU aren't going to be as important and will not cost as much if it's handle with cloud processing. But I don't think consoles will want to kill off offline play. The cost of Xbox Live and PSN + would also have to go up with cloud processing. You might save on the consoles price but wind up having to pay a monthly $50 subscription.
Beside your making it sound like Sony and Microsoft wouldn't benefit from not having to be bogged down by a pricey consoles. Sure the barrier to entry would be less then before and you'd see more of the OUYA and most likely competition from Google and Apple. But, both Sony and Microsoft have been losing money selling their consoles and would probably rather focusing on the gaming side and developing better dedicated gaming OS.
