Two words:
Massive Parallelism
At least on the processing/hardware side of things. Especially on the enterprise hardware side of things. The desktop/interactive side will probably require a software mini-revolution to really scale to this sort of thing. Parallelism in enterprise number crunching or request handling is one thing, but all the division of labour and synchronisation you'd need for interactive desktop applications is a royal pain.
But yeah, barring a major breakthrough in a game-changing technology, smaller, cheaper, faster, leaner, more storage. Might see a shift to fast solid state media in a big way as production becomes cheaper. Once you hit a certain threshold, the storage tradeoff becomes less pronounced compared to spinning disks. Most home users are going to get more value out of near instant seek times and massive throughput than they will out of 3TB (and growing!) storage capacities.
I share a less bleak vision of the cloud. Cloud apps are popular not because they're somehow better than desktop apps, or being forced on people, but because we live in a networked world of a mess of different devices in different locations. The selling point is that suddenly, all your devices can use a common interface (the web) to share data, and sync it all in real time. That's an actual viable value proposition, not necessarily (just) a power grab.
In some ways, I'm actually hopeful that the cloud will solve some problems. Since the heavy lifting gets done on the backend, we can use this to help close the digital divide. When a $30-$50 SOC based computer can run a web browser off shared community wifi, and send output to a cheap television via HDMI or something, then you've just given a huge number of people access to a vast wealth of information, communication/collaboration channels, things like word processors, education resources (Khan Academy?), community resources, and so forth.
I also think using netflix as an example is a big disingenuous, since you're talking about deliverable content, not a computing platform. Television/movie content has always been something external that you have to bring in (either over a wire or on physical media) from an outside source to view. Netflix just moved it off the wire owned by your local cable co. and put it onto the common wire you use for all general purpose data.
The worrying trend I see is the "walled garden" approach Apple takes to software. Apple sells you the device, and is the sole source for software. Approval, sales, authorisation - all Apple. They've got a lockdown on their mobile devices now, and while their proper computers remain open, they've made moves in this direction with their desktop app store. I think Microsoft is making similar moves with Windows 8. This is particularly dangerous, because they have a vested interest in suppressing objectionable software, disruptive software, and software in a competing position to their own. I say Apple here because they're the most visible offender for this right now, but they're certainly not the only ones who want this kind of software ecosystem.
Some of computing's important advances have come from disruptive software that would never have made it through the Apple Filter. Case in point, and it cuts pretty close to home on this forum, system emulation software.
If all else fails, use fire.