That's what I've thought for awhile, too. As far as enabling technology, we're pretty much already there, with phones such as HTC's EVO 4G that can output HDMI. Add some VRAM and you'll have desktop resolutions. There's probably already half a dozen devices at CES that do that right now.
On the UI side, there's some more work to be done. I haven't yet seen anything that comes close to transitioning between the very different worlds of direct-touch smartphone interfaces and decoupled desktop interfaces. The broadening of handheld interfaces into tablet form factors as well as the gradual introduction of mobile UI elements and paradigms into desktop UIs, though, should ultimately bridge the gap.
Definitely, there are some really big opportunities regarding interfaces in that department. When someone plugs in an Android device into a normal monitor and uses a mouse, I guess a different launcher/home screen could come up?
On the UI side, there's some more work to be done. I haven't yet seen anything that comes close to transitioning between the very different worlds of direct-touch smartphone interfaces and decoupled desktop interfaces. The broadening of handheld interfaces into tablet form factors as well as the gradual introduction of mobile UI elements and paradigms into desktop UIs, though, should ultimately bridge the gap.