There are obviously benefits with this approach.
- No need to install local copies and keep them updated and functional.
- Easier to switch between vendors when you don't have to make an upfront investment in a sofware package. (Although I don't doubt that vendors will do everything they can to lock users in..)
- Software piracy should become more difficult
Maybe it's time to bring back Java applets from the dead and brush it up a bit? If online applications are going to be a success I think we need something better than a scripting language on steroids.