Eh, noone said that this is Windows 7 or that they will force everyone to use it. He compares it to Cellphone Operating Systems so to me it sounds more like a mobile alternative for mobile lightweight systems that doesn't need a big HDD to run and if there are many servers worldwide the failure of one wouldn't mean a whole lot.
I don't think something like that will take over the world and I wouldn't want to use it either.
I could also see it working with a few included applications only so for games etc you'll most likely still need a normal HDD-based installed OS, I can already imagine what it would be like to stream the OS, some messengers and FarCry3 over my 6MBit connection, alt-Tabbing would take half an hour, the download would run at 2 bytes per second and FarCry 3 would stop every ten minutes for two hours to download several gigabytes of textures and delete some others because due to all this new shizzlywizzle fancy remote windows they don't offer HDDs anymore.
I mean come on, that's a pretty ridiculous idea.