Do they really expect that to happen?
Microsoft has become like Apple. Don't ask users what they want; if you get negative feedback, and them telling you what they don't want -- ignore that, and give it to them anyways.
Don't give your users what they ask for.
Evidence?
Exhibit A: Removal of start menu in Windows 8
Exhibit B: Reintroduction of 'start tile' in Windows 8.1, BUT still no start menu
I think the same story could be true eventually for on-premise applications.
And the Windows desktop operating systems themselves moving to the cloud as well -- becoming more iOS-like; your OS becomes just a web browser remotely controlled by things running in Azure.
there are a lot of legal, financial, and regulatory reasons for on-premise deployments
Companies' management can be persuaded to look the other way in regards to legal and financial reasons.
They can be persuaded that the IT folks are just using the excuses about financial/legal reasons as FUD to try and protect their jobs.
The cloud providers can trumpet around their ISO security certifications and 3rd party audit results as "proof" that their cloud has compliance with security regulations and provides a safer environment than on-premise; By definition according to these vendors, if you meet certain standards, and you can check off all the items in pre-defined lists, then your cloud is secure.
Most private and public companies don't put their networks through the same standards.
So the cloud vendors are able to produce something that looks very impressive on paper:
only because it's part of their revenue model that they be able to market their cloud environment as "secure" and applications running on it as "compliant by definition", or such and such.