It CAN be useful for some people/games, but if publishers get their wish of this fully replacing game sales, you can say goodbye to playing old games, goodbye to modding games and so on. Plus the image quality is probably quite a bit below locally calculated images due to the compression that needs to be used.And then there is pricing of course. Surely they can get the hardware cheaper since they buy huge quantities, but they do essentially need more or less the same hardware that you would need at home.
Surely they can use it more efficiently since not everyone plays at the same time (someone can play on the same hardware in the morning and someone else in the evening), but that only works within the same region since if they give you hardware on the other side of the planet, you will have considerable lag. This also means that for big releases they will need a lot of surplus hardware or some people will get performance issues or a notification that the game isn't available in the first days. Given how most huge corporations often have performance issues in the first days, it's probably more economical to let some people lag or not have access for a few days than have lots of surplus that you only need on 20 days a year. For your usual server you can probably just get some cloud server capacities from Amazon or whoever, but I doubt these types of capacities come with powerful GPUs for gaming.

And of course it shifts ownership and control away from the consumer to the corporation. When they remove your SP game because not enough people play it anymore to be economical (in the sense that they have to have storage space for it everywhere), it's gone. You can't back it up, you can't crack it and you can't program your own dedicated servers for it, if you want it back you either have to hope retail still exists or you have to program it anew yourself. Or maybe hope for a GOG streaming service, but that may never take off due to low customer numbers.

So uhm, I think if you're the casual type who just wants to play once in a while on your tablet and who only plays the latest AAA games anyway, this might be good, depending on the cost. I just personally hope it won't replace retail entirely because I do play or revisit somewhat older games quite a bit in between newer ones, discover new exciting mods for them, etc. To some extent I think the indie market will stick to the old model due to lower sales numbers though, it might just be the AAA market that moves more to streaming because large publishers want to extinguish all illegal copying, it removes all cheating from their MP-focused games, etc. In these cases the major drawback that is left is the lower image quality, but that might go away once networks become faster. After all, most MP-games are "dead" anyway once the servers are turned off.