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That said, I agree that cloud computing is overhyped. We are in such a rush to sign up for each new aggregating/mashup/online app service that we neglect to reflect on whether there might not be simpler solutions. I dream of a world of interconnected, DIY wikis/blikis --- what a world that would be! There would be lot more room for creativity and individuality --- and less of a twitterlicious soundbox.
But the real driver of these changes is mobile computing. The average iPhone user needs slick cloud computing.
Also, no one would slight anyone using the cloud for things that are convenient and not crucial or overly private. I, in the past, have used gym lockers, coatrooms, and left my shoes at the doors of establishments and residences that would prefer that I not wear them inside. Equivocating between that and "[...]moving to a 'cloud' model — even if it does involve storing all their files and mail and photos with The Great Google in the Sky[...]" is not constructive.
Just like the original dot-com bubble burst when people realized that e-commerce was just really reactive catalog shopping and wouldn't alter the laws of physics to create money out of thin air, eventually people will realize that cloud computing is just storing every document that you have offsite, just 1000x less trustworthy, and accessible and deletable by at least 1000 employees of Google at any particular time, from any location on Earth.
That being said, I love being able to test out and deploy stuff on EC2, just don't expect to see my medical records or client lists in the cloud any time soon. I would much prefer to have them locked inside a .pst file that is only openable by an outdated version of Outlook that only runs on Windows ME, or even, maybe, take Stallman's advice because he thinks about the implications stuff a lot more than I do (and the solutions that are the result of what he's established are often really nice and easy to use!), and shouldn't be flippantly dismissed like some ignorant throwback dirty hairy hippie. Even though he is a throwback hairy hippie. He also may be dirty, but I haven't smelled him. He looks a little dirty.
Of course it's inevitable that people will use services that are free and convenient. What's important, from a free software perspective, is to make sure there are more of those services like Identi.ca, less like Google's services (which I admittedly use a lot). RMS gets that on some level at least, though that's still new territory for the FSF that they're currently trying to feel out.