The notion that iCloud wants to displace the centre of gravity computing from full-fat personal computers (AKA smart clients) to lightweight personal devices that are always connected and significantly locked down in various ways (once known as dumb terminals and thin clients, now in sexy cases and with physical advantages derived in part from the benefits of lock down) may well be right. That doesn't mean it will work.
There are permanent scarcities: spectrum, bandwidth, throughput, heat dissipation, privacy in an age of connection and common sense. Just as Apple threw away the floppy drive before most users were ready and the replaceable battery before the chipmakers were ready and expected them to just keep up, now Apple wants to throw away rich local processing and storage in favour of bandwidth and a regulatory environment that aren't ready yet and have networks and government just keep up. I don't expect all users to appreciate the compromises involved until it bites them (ditto Chromebooks).
Personally, I still like a powerful local system that gets better when it's online but still works at full power when it's not (because I'm in a plane or another country and not prepared to pay that much to be online, or because a grandmother/backhoe/political entity interrupted my connection). There's magic in the cloud if you take advantage of its strengths and bear in mind it's weaknesses, but the cloud itself isn't magic - except in the sense in which most journalists quote Clarke's third law (any sufficiently advanced technology is indistinguishable from a rigged demo).