1. Less piracy, but you simply can not sell that to whole regions that do not have fast enough internet.
2. So, instead of needing high-end console or computer you'll need the fastest, expensive internet connection. You may have a lot of bandwidth now, but that would require a lot of bandwidth coupled with low-latency. If you don't notice if youtube playback or start of download is delayed by a second, you will with a game.
3. True for PC, but consoles do not suffer from hardware compatibility already. If you are trying to imply a cross-platform play, then I will say that mouse, keyboard or iphone touch screen are not adequate replacements for dualshock or wiimote.
So it may work as an addition from the traditional gaming, but as a replacement? Not in foreseable years.