I'm not saying it will succeed (that remains to be seen) but:

1. Not if you don't have the money for a computer in the first place. My grandparents would really like to get online, and the difference between a $400 laptop and a $200 netbook is significant.

2. Not if all you need is the basic functionality this device offers.

3. This is just all sort of wrong if you don't live in a metropolitan area.

4. That's your opinion, and a valid one, but I love the cloud. I'm moving everything I can to it. Of course, I don't personally concern myself too much with security, but I still think it's a great tool for a lot of casual computer users.