I've heard people play Fortnite Festival (basically Rock Band, and very latency sensitive) over Microsoft/Amazon cloud streaming.
"low bitrate and high input latency" is what you'd expect rendering offsite, but in practice, it seems to work surprisingly well.
It didn't seem any worse than cloud gaming on Xbox/PS Now/Luna/Nvidia/etc.
I contest that rhythm games are the least latency sensitive. You'll automatically adjust to (consistent) latency and not notice it. You also don't get much feedback unless you miss a note.
Stadia worked absurdly well. One of the beta games was Thumper, a demanding rhythm game (I might be the reason why it was in the beta lineup actually). How well did that work out? Well, the latency made it hard to play... until I switched my TV to so-called "gaming mode". And then it was fine.
No kidding. The TV was introducing more latency than Stadia itself.
I also once tested it on hotel wifi. It worked great.
(Mind you, this was in Europe. YMMV.)
The business model however was terrible and killed the product IMO. Which, honestly, good: Stadia would have killed video game archiving efforts. If a publisher folds and Stadia and similar platforms stop streaming its streaming-exclusives, then those games are gone. Not worth it, no matter how well it worked.
If they decide one day to fuck you over, there is nothing you can do about it.
If Sony and MSFT decide to go down this route and it's the only way to play blockbuster games, it'll happen whether we like it or not because the market cares far more about playing the latest game than it does maintaining control over its own destiny so to speak. Very few consumers will eschew the Latest Thing and just happily play older games on their own PC (or console) to make a point to the publishers.
You'll note that all those things are still there, and their competitors are either not there or not significantly bolstered by people disgruntled by those changes.
And making media subscription more expensive will just push more people to piracy, so they will just loose money due to their greed.
Maybe, or maybe it'll live a giant gap waiting to be filled in by a new competitor in the console market.
It is not suitable for competition ranked players. The average player will stomp over high ranked players.
Stadia had other issues beyond fast Internet, like asking a community focused on Windows/DirectX to add support for the Stadia/Vulkan stack.
At the last Stadia developers conference, a few months before it was killed, one of the talks was about doing something like Proton for Stadia.
EDIT: Here is the talk,
"How to write a Windows emulator from scratch"
that sounds like a broadening market to me.
There are lots of techniques to hide latency.
I don't get the thing about the GPU: even rich people don't necessarily want to bother with owning a GPU thing. And whether fast internet is expensive depends on where you live. Here in Singapore 10 Gbps fibre to the home starts at around 20 USD per month; and we are in a really high cost of living country (we usually topped charts of 'most expensive city to live in').
Thanks to your refinements, we know that remote gaming like this might not work for the hillbillies, but perhaps it might work in the centres of civilisation?
Global access to high speed home Internet is growing not shrinking, there are plenty of ways to creatively manage latency especially when you control the endpoints, and at the end of the day the publishers can effectively force the transition by only making the latest blockbuster games available on the cloud model.
You and I will bitch and moan but the vast majority of consumers (really their parents who pay for them) will be happy their new console is small, light, potentially cheaper, and silent. No more boxes of games to store makes Mom happier. Eventually much of the hardware could be built into televisions from affiliated manufacturers so all you have to do is buy controllers and sign up for the subscription(s).