I think Doctorow is starting to sound a little like Richard Stallman. Doctorow is lamenting and predicting the end of user control of our software, much as Stallman predicted loss of control over the operating system. GNU provided an option, while the majority of end users never noticed or cared as proprietary OSs took the dominant market share (at least in the PC market). Those of us who really know enough to care either use proprietary OSs willingly knowing that there is an alternative, or use libre OSs.
The same will be true if/when SaaS becomes dominant. While this generation's hackers will lament this as "the end of computing FOREVER," in reality the libre applications that already exists will still exist thanks to free licenses (and a bit of the Streisand effect, I suspect). Once software is libre and reasonably well distributed, there is little that can be done to prevent its availability. Hackers will continue to use and develop libre software, as they have for the last 20 years or so. Hackers will have the options that they do now.
The picture changes a bit for the average joe. They will have their software served to them, and if they know the difference it will be on a superficial level. Perhaps this is for the best; perhaps not. Perhaps the corporations will take their newfound powers and exploit them for nefarious purposes; there will be an alternative, even if unknown to the average end user.

It's funny you should ask because I'm actually an American computer engineering student as well. On the side though I've just finished my Spanish minor, and while I haven't used it much in my engineering classes, it has been a much needed break from the hard-core "left-brained-ness" of engineering. It's coming in handy -- I'm working on getting an internship in Mexico next summer. More importantly though, it's helped me to learn to COMMUNICATE, which is something engineers are stereotypically bad at. Moreover, I've taken classes and labs where I was the only person who could understand the instructor -- not because I spoke their language, but because I knew what it was like to be on the wrong side of a language barrier. I've never had a problem understanding a person with some understanding of English, whether they be Chinese, Indian, German, or Egyptian. For that, and that alone, my 3 years in High School and 2 in college have paid off.