I've personally played around with the Moonshot and being able to squeeze 45 blades in a 5U rack (the specs say 4.3U...) is a nice thing. Each blade has two DIMM spaces and a SSD, which is good enough to load a hypervisor, then use the onboard bus for going to a storage array.
I wouldn't say that each blade is as powerful as a blade in HP's conventional 16 blade enclosure (which takes 10 rack units), nor as powerful as a 1U standalone server... but you can choose what goes in, from a low end Xeon on the m710 to an AMD offering, to an Intel Atom, to ARM based procs.
High density enclosures like the HP Moonshot are quite useful. VM farms come to mind as well as privilege separation for security sensitive tasks. VDI also comes to mind (so the extremely sensitive stuff can be used and manipulated by RDP or Citrix Receiver as seamless applications, but a compromise of a user's desktop doesn't allow the entire database to be taken.) It also makes a decent testbed when doing production to test copies and staging OS/program updates for soak testing before they updates are pushed into the field. I wouldn't say high density server platforms will replace everything else (due to physical limitations, the blades are not going to outperform standard 2 Xeon machines), but they are a useful thing to have and help save space in the server room.