the problem with the cloud is the simple fact that you arent always tethered to a data connection. 

like when youre traveling. do people actually use heavy data when roaming? even if i was rich - and im far from it - i wouldnt be paying several dollars per meg of bandwidth. youd have to be completely insane to use data while roaming at the extortionist prices most carriers charge. which means when traveling you are completely at the mercy of wifi hotspots since your device is completely useless without one.

there are rural areas where i dont always get coverage. so what do you do with a tablet that has no onboard storage and needs to be tethered to the net to work?

and then theres the fact that yes, while some files are suited for cloud storage - like documents that you (or several people) are working on from multiple devices, photo galleries, etc - many others arent. its a waste of your data connection to be constantly streaming everything from the cloud every time you use it. look at how popular offline apps are: like offline voice search, offline maps and offline translate are three features that people have been clamoring for for so long.

as many tablets and smartphones have proved, an onboard 8-16 gigs of storage is plenty to install a lot of content. memory prices are constantly coming down, so it gets cheaper to add it every month. designing a device with absolutely no onboard storage is just plain stupid. id never buy it, and neither would any tech savvy person i know.