I've always thought that the cloud model made sense for smaller sized companies, no IT staff, multiple locations which needed to access applications with minimal concern to setup and maintenance.
Beyond that I do expect the pendulum to swing. Look what's happened just yesterday with the release of iOS 7 update. All these pie-eyed developers who ""made a fortune"" on their iOS apps but saw demand lag and dwindle have suddenly sat bold upright with the new idea of charging for the new iOS7 version of their app even though it looks exactly like the old one. I think there are going to be some ""sad faces"" in the iOS developer lunch room as many of these lucky souls awaken to the fact that they got an early hit and perhaps not as many people are keen to repurchase --
http://goo.gl/cjRJrh
tl;dr:
A lot of this demand and hype is marketing.