Computing goes in cycles, as always. There's nothing new about the concept. Now, stuff is moving online to server farms, since companies are able to manage resources most effectively. In another decade or so, things may start to come back to desktop computing. Maybe people will have small servers built into their routers that all devices will sync to, i don't know.
And if things do end up moving all the way to hosted solutions, with the standard being thin clients in every home, why would we bother with one in each city? Bandwidth's getting cheap enough now that we could go with two or three hubs to a continent and have that be our computers.