I think smugmug's cloud/colo hybrid is more likely to become the norm than the all-cloud dream of not having to deal with hardware anymore. When it comes to the "undifferentiated heavy lifting" aws wins. s3 for bulk storage, ec2 for asynchronous computing, cdn's for edge/delivery. But when it comes to your core data (meta data? the 64bit picture_id as opposed to the 2megabyte jpg) you just cannot beat raid10 ssd type colo'd setups right now.

Essentially I think we're going to be in an 80/20-ish cloud/colo sweet spot situation for years to come.