In soviet OS, everything is a persistant object.
Kidding aside, I see several major issues with this concept: the increased risk of losing valuable data, the slowness, the very low interoperability (how do you exchange data with other OS's?), the whole span of programming languages that are not supported (I don't want to be coerced into using Java or C#, what's that about?)
Another issue is that I think the "object oriented" paradigms that are in use today are flawed in some aspects, and instead of basing everything computing-related on that, maybe we need to work on the concepts first.
Adding features does not necessarily increase functionality -- it just makes the manuals thicker.