I've actually been thinking about this problem a lot recently.
I think it'd definitely mean a dramatic shift in workflow which would have to be learned, although I spent years learning how to work on a computer, why not spend some more time learning to do so on a mobile device? I think that in general, developers would resist the idea but for those that were open to it, there may be hope.
I think the first thing that'd need addressing is the ability to type. An on-screen keyboard just won't cut it, we're working with limited screen real-estate here so we need some other way.
I came up with an idea for how to replace an on-screen keyboard, without reverting back to the old-school blackberry keyboards or the number pad we all used on those old nokia 3310s.
What I propose is a reduced size keyboard affixed to the back of the device somehow.
Eight of these keys would be your 'home' keys, where you rest your fingers. Other keys would behave as function keys. You'd need some level of visual feedback on the screen so you can see where you are on the keyboard. Maybe some extra keys could be thrown in there for very commonly used keys, brackets, return, tab, space, backspace, etc.
Ultimately, you'd end up with more keystrokes than normal, simply due to the fact that you're having to shift around the keyboard using other keys, but I'd imagine with enough time, people would be able to adapt and become proficient at typing quickly with these devices.
I haven't thought too much into screen real estate, but I think a huge benefit could be the ability to switch between applications/panels quickly (using the physical keyboard mentioned above).
Tooling would be super important, having tools that allowed you to mimic your desktop workflow would be super important. I think this would probably even need to be done at the OS level. I think you'd need some way to install a mobile, stripped down distribution of linux with a desktop environment specifically built for the mobile environment.
Further thoughts:
To increase adoption rates - you could make it possible to dock the mobile at a workstation and use it as you would a regular computer.
I definitely think it's possible, I'm just not sure anyone's that interested in making it happen. Personally, I think it'd be awesome to see this kind of thing come to life and I would definitely invest the time in learning to use it given how much time I spend on trains/travelling. I don't always have a laptop with me to get work done so having this all in my pocket would be very convenient.