Right now, thin clients are doomed for the same reason that they've been doomed before: users want too much. I believe that watching YouTube videos and plugging in their USB keys are pretty much the minimum level of features that users will expect and accept; if they can't do both, they're operating in a fundamentally crippled computing environment, which is not the way to make them happy. And unhappy users sooner or later push back.

(YouTube is not merely desirable by itself, it's also a convenient proxy for other useful things. If you can't do YouTube, you probably also can't do video conferencing, watching training videos at your computer, or probably even VoIP, which wants low-latency audio.)

But that's just the short term doom, and a lot of it can be overcome with enough work. Unfortunately, that illustrates the long term doom for thin clients: making everything work in a thin client environment always takes extra engineering work and extra time. Desktop computing has reached a point where thin clients are doomed to a perpetual second class citizenship, and second class citizens have never done very well.

It's popular to argue that all many people need to do their job is access to a small number of applications and it's much cheaper to provide this through thin clients. I don't think this is going to succeed, because 'it's more cost effective to provide you with a crippled environment' is not something that resonates with most people, which means that they're going to try to escape as soon as they can.

(Besides, history is against this argument, since it is just a rerun of the mainframe and dumb terminal arguments from the 1980s and we know how those came out in the end.)

Sidebar: thin clients versus dataless clients

The distinction I draw between thin clients and dataless clients is that thin clients do the computing elsewhere while dataless clients do local computing but don't have important local data. While thin clients are doomed, I think that dataless clients have an increasingly bright future.