Like any other long term trend, cloud computing is very much in its infancy. All the issues you point out around DDoS, data security, accessibility are valid and need to be solved. However, judging from these issues that cloud computing will die is, IMO, premature.
What makes me believe in cloud computing is the terrific customer economics and value proposition for the right use cases. When I was at Oracle running the SDP/Telco team, we basically avoided about 500K worth of CapEx by using EC2 for functional, performance and conformance testing for a total cost of about $25K over several months. Again, this is just about hardware arbitrage but some of the economics carry over to the higher layers of the stack, particularly for applications where peak usage and average usage vary widely.
Making all this actually work in practice is of course going to take a while. Like every other major computing change, this will probably take 10 years...
-Indu
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