I'm almost certain it's going to happen, probably not by next generation but the generation after definitely.
Business model wise I think there'll be a mandatory small subscription ($5 a month like ps+) and then ontop of that you'll have to buy your games for the usual $60 which the publishers/developers and Sony get there usual cut of and then Sony get a small monthly fee to cover extra costs... in case for example someone buys one game and just plays that for a billion hours.
It's useless to speculate about hardware, because for one it'll be 10 years down the line and two it'll be specialized machines designed specifically for the purpose of cloud gaming and... well they haven't been designed yet.
PlayStation Now isn't just Sony's attempt at backwards compatibility. It's them looking towards the future at what gaming is going to become and getting valuable experience when it comes to cloud gaming and the infrastructure and hardware that is required. The audience you can reach without them needing to buy specialized hardware or make an initial investment on that hardware is insane. Nvidia have their own Cloud Gaming service and soon Microsoft will follow if they have any plans on the Xbox brand surviving into 2030 and beyond.
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