But as the browser and web got more powerful and we started moving around more and having more computers (work, laptop, home) the centrality of "the cloud" because a selling point and for many applications the "local power" of the desktop was less important.
Now however we're seeing new constraints play a role.
On mobile, again power in some cases is a bit limited, we have more data/sensors to play with and HTML hasn't caught up to complicated swipe interfaces too well yet. We have location and accelerometer sensors that haven't been too well integrated yet. And your phone is always with you. So we're seeing a swing to cloud data back local apps again. The 3 mobile apps I use the most are google reader (the new site layout is space wasteful in a browser on my netbook, good luck having fun reading on a mobile browser), a movie player and a music player. On my desktop I'm just as likely to use grooveshark or some other streaming service, but with still expensive mobile bandwidth having "locally cached" mp3s wins out over streaming.
If we want to move this back all onto the web, we need an html6 that supports swipe, mobile app like layout, local storage (I know, html5 draft kinda has this... ish)
It's all about device constraints and what is available.
This is just a signal we need to develop the browser some more if we again want it to be the platform of choice in this new space.
History tells us that this "balance" is a mirage. It's a see-saw with a foundation based on thick vs. thin clients, i.e. where the horsepower is located.
The internet is going now where and this won't hurt it at all.
As for the web, the subset of the internet that is about passing webpages around? Well, maybe it will be bad for it. And possibly that's not a bad thing. There are pros and cons.
Competition between Android, iOS and Windows Phone already seems to be spurring a race towards openness.
I've done a lot of "desktop" aka "client/server" programming... 5 years ago everyone declared that DEAD.
Now, we're going back... it's just now there's a few more devices to support, with tinier screens + touch.
It really is all very temporary anyways. Native apps took off because the web wasn't ready for mobile (most sites were horrendous, etc). I am finding more and more sites offering up excellent mobile experiences that rival or exceed what their parallel native apps offer. Just a few stories away from this the fogcreek crew say "Apps provide things we can’t get out of the web: better speed, offline support, smooth animations, push notifications, and a native look and feel". Of those the only item that legitimately is an advantage of native apps is look and feel.