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I don't understand why this would have more traction than something either fully-cloud with a central "server" like Google Drive/Docs or Office Live 365 (or even something much simpler like Evernote), or something that's a plugin to MS Office (like the Live bits or Google's Cloud Connect).

In other words, who wants this and for what purpose?

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Two reasons: 1. a lot of us like having our own local copies of things (the same rational as Git, when talking a version control system). 2. a lot of use cases REQUIRE a local copy, to support disconnected operations (working on airplanes, working in remote areas with poor connectivity)

Google Drive keeps local copies of things that can be modified offline.

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