That would indeed be the most obvious way to go, it would also make the device more powerful down the road since the computing is done on a smartphone which only get faster and faster by the year.
It seems cool from a technology point, but I'm not sure I want to trust Google (and thereby the US Government) my life. Or am I doing that already by using Google Search and GMail?
Google Glass will be massively popular with the active crowd (kind of how the GoCam got its big break) - I would personally use it in place of recording videos with my phone! I would not wear it all the time though, that's ridiculous.