I mean, it's been a "nightmare" since the 90's. Yeah, that's how old this concept is and how much it hasn't happened yet. And it never will, because selling devices to people is already profitable, and the cloud is already expensive even for stuff it's not supposed to be expensive for. LinkedIn literally cancelled it's move to Azure Cloud just a month ago, and they were bought and owned by Microsoft themselves years ago.
"The cloud" has been the future of gaming for years now as well, totally going to work. Just look at the massive success of Stadia. Nvidia GeForce Now has basically crashed the PC market.
Or, to not be sarcastic for a moment, I remember chatting with Carmack back when he was still interested in games and cool. He thought cloud would come, then a handheld device you could just game on would supplant that. That last bit got me thinking, anyway cut to not many years later and "The Cloud" was skipped altogether straight to the Nintendo Switch.
Really though, the big thing to take over the market is sitting in people's hands already. I've been thinking about how make a phone a legit decent gaming device, and think it can be done with enough effort in relatively short order and expense, if only the effort is made. Imagine if Iphone if was suddenly "good enough" for gaming from a controller perspective, rather than just a performance perspective like it is now. It would have an absolutely crushing advantage in sheer market size in rapidly short order.