Doubtful it would work any better than the custom VM solution that Genymotion (mentioned in the article) does (for this specific pain-point).
I would still need to adb deploy my apk to the device (which is a process that really drags development even when doing it to local devices) and now its even worse because it is remote. Also this remoteness would add all sorts of new issues like that fact that if I'm developing a server in tandem with the client app, now I have to jump through hoops to make the server remotely accessible (so your service devices can see it) whereas otherwise I might just be running it locally in a non-publicly accessible way for development purposes (solvable problem, but still a lot of friction and this request for a simulator is all about removing such friction).
Android devices as a service is still a good idea for other things like testing & QA because while Android fragmentation isn't as bad as it used to be, you still do see device-specific bugs (or at least platform-specific, like TouchWiz bugs on Samsung devices that don't impact other versions of Android) quite often when developing and having access to specific devices would help in such situations, but I don't think it addresses any of the main problems that are driving this request for iOS-style simulation (which, FWIW, I totally agree with Jake Wharton on).