You were indeed very clear on one side of the topic, and you base it on your experience with numerous companies so - I am not going to try to convince you......However:
Like everything in life it is not Black or White - the truth lies in the middle
First I think you are referring a bit to Grid computing and less to Cloud computing.... Anyway Cloud computing has a wide range of aspects.
For a true Cloud computing environment to be successful you need the providers of the services to know what they are doing.......and even though there may be problems - transparency is what is expected:
Anyone can have problems with their Exchange or File servers in their organization it is a mix of Hardware and Software which may fail....
The expectation is that it will fail a minimum number of times per year, and that it will be back on line in a very short time without loosing information.
Back to The main issue:
Doesn't matter what it is called : SaaS , Cloud Computing , Web services etc.... The use of online components all the way to a full hosted application is a reality and is being used in almost all organizations, or in the near future pipeline in those where it doesn't exist.
A few examples:
You want to swipe a credit card - you can build an application with interfaces etc... most companies provide a "web service" that performs it in a secure way without the need for any software on your end.
Let's say you want to integrate a map of location of your customers , or a route for your salesmen to follow - integrating an online map into your application, becomes a piece of cake....
Those were example of usage of specific components. You trust these services to work and make them an integrated part of your business process. Taking it up another step to a full hosted solution is just a matter of acceptance and usually a mutual decision with the IT and the management to go down that path.
Small and Medium organizations usually can't afford the robust environments that are designed by the Cloud computing service providers, and if anyone needs to deal with downtime , DRP planning and fast recovery - the current trend is to get it as a service.... and usually it will be better than any in house solution.
Ok - That is all for now.... Be back soon with more.....
I think and hope that this will turn into an interesting discussion......
Remember - no Wrongs and Rights.... just opinions