I'm going to go ahead and be devil's advocate and be unpopular.
I'd say, if they aim this at the casual gamers, the people who don't want to deal with any kind of complex stuff like upgrading a PC or even knowing what min specs are, AND they can pull off a launch without failing their customers, then I think they could have something.
no, its not going to kill off console or PC gaming, or store retail or Steam like services either.
But, it may be another option, and aren't more options always a good thing?
I'd advise them to be honest about minimum specs in terms of line speed however, as if you get people who don't really know much about computers paying for a service, they're not going to listen to techie excuses, they're just going to want refunds.
All in all tho, I think they may have a market in selling to the casual gamers with disposable income who don't want to make a huge investment in a gaming PC.