I'm not sure this implicates cloud in particular.

I see it as a company that doesn't understand the difference between securing an operating system and securing a website. Which is especially bad considering the train wreck that is web security. Jon was apologetic that his bug was so 'lame' since, unlike operating systems, the web was generally not designed to be secure.

"Web security" in general depends on the secure behavior of the web browser, which in turn depends on the security of the operating system, hardware, and so on. If you reverse the arrows in the architecture, as Android appears to have done with Marketplace, then the whole thing becomes much less stable.