When I first read Vic Gundotra (engineering v.p. at Google) statements he convinced me. But I'm not so sure anymore that browser delivered apps will win against custom applications.
Most users don't even know what a browser is (http://www.youtube.com/watch?v=o4MwTvtyrUQ - btw, this has been made by a Google intern) and custom apps already provide a better experience for them.
The proof comes from Google itself: Google Earth, Google Maps, Google Mobile etc.
Browsers could soon become obsolete for the vast majority of users - who will probably completely ditch PCs in favor or smartphones.
Edit: I'm not saying that I like it. I'm just saying it could happen.
You will type your Word document at the office and you will bring just the smartphone with you when leaving to check email, read the news and stay connected in general.