I like this post by Microsoft’s Mesh team, too. It makes a great case for “fat client” personalized UI engines that manipulate data that is temporarily stored locally. It seems that locating that data in the cloud would solve a lot of the sync problems created by multiple local data stores. Yes, in some ways, syncing is a problem, not a solution.
I think it’ll be a long time (make that “never”) before cloud computing does great UI (voice reco? gesture-based manipulation? 3D graphical manipulation? hard-coded privacy/identity/authorization?). Have you used a Web app — other than a browser — lately? But I’m still waiting for Microsoft to do a decent job of “data mining, indexing and transformations on” local data stores. Have you used Outlook “find” lately? That’s one reason why Microsoft has to duke it out with Google, and why Google cares about client-based search (and not browsers or operating systems).