It won't happen for a lot of industries. I get a rock solid 0.7ms roundtrip latency using an RME RayDat. I can't play guitar decently with anything more than 4ms of latency.

Hybrid? Maybe. But even so, I think it'll still make more sense to just own the hardware and not rely on WANs with variable latency.

For the average schmoe or office worker? Probably makes sense to have it on the cloud, especially as how well Xbox cloud gaming works for most people.