Network lag will always be added to all the other lags a gamer would normally have on a local machine, and it's a lag comparable to a HDD one even on very fast connections, and many orders of magnitude higher than the internal bus lag we have when we have enough RAM to load a whole level on RAM. So the experience on games that have fast gameplay would be comparable to playing them on a very low-end PC. It's not a casual thing that the most successful online games either are very simple or simplified or if they are more complex, at least they make you download and install game engine and levels locally first, so they only have to transmit a limited amount of data to tell you what's happening in the game world. Most surely, if you want hi-res graphics at a high framerate and low latency, you need a powerful GPU locally, a cloud based one could work only for fixed frames or low framerate and when latency higher than what's acceptable in gaming isn't a problem.
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