Mabye in ten years. Maybe sooner in some countries it depents on their internet infrastructure.

What about for streaming older games?

Ultra HD Remakes of everything all 10 years :P
Kinda what PC Emulators do - FF12 can look gorgeous on a PC and so do all Wii Games - I love to play Wii Games in 1080p.Xenoblade looks so awesome.

With streaming this wouldn't be a problem cause it will always the max settings of the possible hardware the servers have(hopefully always the newest or at least comparable) or the emulators for older hardware support.

Internet Connections in Middle Europe and Scandinavian Countries are already at 100MB/s Download standard for cheap.
For us Cloud Gaming could already come - I wouldn't need any retail game anymore in my life.
On PC its kinda like this already - You buy the stuff from steam - Sure you have it on your PC after you downloaded it but you don't have the cases and all that stuff.Only difference would be you don't have so much data on your HDD.

But i don't think it will be standard Next Gen
It will be an addition - Maybe more common and the middle to End of the Next Gen.After that i can see streaming devices with GoogleTV and Sony together.
We can count on it when the USA is catching up with Europe in point of Internet connections.They are a far too huge market for EA and so on.

I can't stand the lag. I think cloud gaming will always have higher lag than online multiplayer games because the time needed to compress the image before it can be sent.

i hope it fails due to the lag although there are several other reasons why I don't like it (you don't own the game, the publisher can add and remove stuff from it like he wants and there's no way to determine sales and success of games through the cloud).

that isn't true - that is up to the business model.

Nexflix is a cloud based movie services that for a low monthly subscription fee you get instant streaming of lots of content but you don't get to pick the content.

Amazon's cloud music/movie player let's you buy any song/movie you want and instead of getting a disc you gain access to stream that content.

...the part that makes it cloud is the just streaming part (no install, substandard equipment support, ect). 

and yes it is the future. 

I think what happened in the past week in Virginia, sending instagram down among other sites, shows that while cloud gaming may be the future, we're not there yet.