No one has pulled it off because it’s an immensely difficult technical and practical execution challenge, involving deep knowledge and experience across many fields. To make OnLive work involved fundamental work in psychophysical science; custom chip, hardware and wireless engineering; complex real-time software — from the lowest- to highest-level, and real-time network engineering down to the sub-packet level. And, it required a deep understanding of business structure in the video game, Internet, hosting, server and consumer electronic industries. Then, finally, it required an enormous amount of just practical execution: testing the system in hundreds of homes and ironing out every wrinkle to make it operate seamlessly.
And, it’s no accident that OnLive works so well. It took many years of development, testing, and refinement to get it to work through the vast range of Internet hookups in the home, and there are a huge number of particular mechanisms we’ve had to build into the OnLive system to overcome each particular issue we’ve run into. OnLive has been tested in hundreds of homes through the US, through a wide range DSL, cable modem and fiber connections, and through any manner of consumer firewalls, routers, switches.
Emphasis mine.
From this interview. A few pages of softball questions, with some interesting things. Like, when he says 'fundamental work in psychophysical science' -- what does this mean? Is this their way to get around the otherwise insurmountable latency problem? He goes on to say that this will be a platform for the price-conscious AND the high-end gamers.