There are a number of reasons why you might want to use jquery directly from the server. Some off the top of my head...

-You can keep your application code hidden from prying eyes

-You only serve up ~120kb of javascript to the client no matter how intense your application is

-You can get better response times for realtime games and apps since what your user is doing is tightly coupled with what actually needs to react (the server).

-You can write 3,000,000 or 10 lines of application logic and it will not affect the speed of the client's device.

One flaw is (potentially) in coming up with a new way to cache redundant requests properly.