I think "bash for the web" is a cool idea. I think it might make more sense to see this as a firefox plugin, though.

One reason we see these things as hosted apps is because authors are excited about users doing a lot of the work for them and submitting commands. (I know, I've worked on something like this).

Mostly, I think the core language and interface are more important than the libraries, and these will run better client side (unless you connection sucks). The core has to be robust because only real nerds will use it anyway, and they won't use it if it won't save them much time.

So, make the core more important, run it locally, make the user submitted libraries easily downloadable/syncable, and always assume the core language is more imporant that library usage (so optimize keystokes for core operations).

my 2 cents.