I doubt that. Nintendo will just have their own version... assuming this actually makes it to mass market and internet in the furture is fast and stable for everyone.

don't know. people always think consoles will be replaced by tablets, smart-tv's, onlive or whatever but they always forget that consoles always try to do something new then which isn#t available with your smart-tv. kinect as example.

sure they could put everything in a tv. a tv with kinect and gaming and whatever but then we will see something new from nintendo which the tv's don't have and we can't imagine atm.

and if we would get all that with smart-tv's, i don't care if my gaming device has the name "nintendo/ms/sony console or samsung tv. nintendo would make games for that then, same with sony, they could concentrate to make games and wouldn't have to lose billions with the console itself^^

so are they gonna sell something like this below US$299? since most people feel paying above US$299 is too much for gaming...

People are already complaining about the lag in Diablo 3. It will never work fast enough for certain games unless you live close to a data center and have a fibre optic connection. Since I live in a small town that probably won't happen for a very long time.

And you would be wrong to think this will speed up technology improvements in gaming. Sure it's easier to replace hardware in data centers, but we're talking about for profit corporations here.
I don't see on demand services trying to bring you the best 1080p video with 7.1 lossless sound at home. It settles at a quality which most people will accept. It will be the same for games. Why spend a lot of money on hardware to give you the best experience when you can get most to play your older and cheaper hardware.