"Eh, the Cloud will become like electricity. One day we won't even think about it but it will be integral to daily life. "
That's what they said about flying cars and personal helicopters. Where's my flying car?
That's also what they said about automobiles replacing horses for transportation. Where's my horse?
"Outages and breaches will occasionally happen but we will live with it."
Putting all our eggs in one basket is never a good idea. There will be more outages and more breaches on SaaS than for private client servers because it becomes a more bigger and viable target. Distributed systems unlike centralized systems like cloud are more difficult to bring down all at once.
Two things: 1) An internal data center IS putting all your eggs in one basket. And the quality of service infinitely varies from shop to shop. 2) As it turns out, the biggest threats to data security are internal, not external. Not to downplay the threat to the Cloud, but you're implying internal hosting is somehow less vulnerable to an outage which is not the case.
"Software vendors like Microsoft won't even sell packaged software (even games) because it will all be SaaS. "
Service doesn't scale and never will. Saas will never beat packaged software in revenue because it has huge associated costs both for the provider (she has to pay for bandwidth and other expenses every month) and for the consumer (she has to pay every month compared to just once).
OK, now this is just not true. Allow me to enumerate: Google Maps, Google Apps, YouTube, Facebook, Flickr, Twitter, Salesforce, Gmail, Hotmail, Skydrive, Box. Shall I continue? And these are only a few examples. Also, private app ownership (actually, it's a lease) is incredibly expensive. Aside from the obvious cost of hardware and software you have: rent/real estate, power, backup power, wiring, security & intrusion, fire suppression, cooling, on-site staffing, backups, and so on. There are LOTS of C-level executives who would love to exchange that kind of overhead for app rental, desktop terminals and WAN capacity.
All of that aside, the forces driving cloud adoption are coming from three directions: 1) IT suppliers who want more control and better revenue streams. 2) Businesses that don't want to build their own "power plant" to run e-mail and accounting apps, 3) Consumers who want access to their data anytime & anywhere.
It's inevitable. It's progress.