This is to address the older ppl here who disagree.
Let me post "my specs" first: I'm 30 although I feel older in thought. I am not afraid of change. I think older generations are at least somewhat wiser than today's generations, including my own, and I think that's due mostly to technology and how it's changed the average person's life to be more about quantity/instant gratification. I think that my generation and those younger than mine are extremely narrow-sighted and are more likely to be easily controlled as a herd than, for example, my parents' generation. To use a cliche, today's generations are ever more faithful to the Matrix societal model.
However, just because I think there is a better way, that we could do better, we could live better, we can more fully develop as humans, it does not change reality one bit. Reality is only one way and it is brutally honest. The ones dreaming about paper making a comeback are living in fantasy land. Nobody's going to use paper in a short while. That may be a good or a bad thing, but it's irrelevant to reality. People are no longer learning cursive writing. Good or bad? Doesn't matter to reality.
To address the OP, the only reason datacenters are not deprecated right now it's because there isn't a better solution. That's reality. People are not spending money on data centers because they like the idea, or because they fancy the term "data center." They are doing it because it is a solution to a practical problem they are faced with. Until "drill bits" and these "so small" computers can provide a reliable service with an SLA (and remember, this would all have to happen over these magical wireless networks we keep hearing about, which we all know are rock-solid, and should be your transport of choice for your credit-card-collecting e-commerce website), data centers won't be deprecated. This is reality. As cool and new-age and web20 and ajaxy and lofty this idea may sound, it's not here and it's nowhere near. I don't see it ever happening, not because I like data centers but because I think some other method of delivery will become king when data centers will be deprecated. What that method is, I dunno, or I do know but I'm not telling because I want to be rich (and that's reality).