Won't work I don't think.
It's like this, the system they present has all of the disadvantages of digital downloading, including no hardcopy so you have a total dependency on their service. In addition it's requiring a membership fee in addition to whatever they decide to charge for the games, like say paying STEAM for the honor of being able to buy stuff from them.
On top of that, these fees will be on top of whatever you pay for cable or whatever to begin with. I very much doubt they are basically pimping an all inclusive entertainment package that will replace current network packages for $15 a month.
Then again I'm not buying you will be able to do this without any investment in hardware that is compadible with it. I mean you can't socket a joypad directly into your TV. This means on top of everything you would have to pay for batteries constantly at the very least since you wouldn't be able to charge right off a console.
Also I fail to see how without a hard drive being fit into this somehow, how the service is going to save games, never mind provide for "Downloadable Content" which the entire industry is basically obsssssed with (and which to me went from being a good idea, to one of the money grabbing banes of gaming, it's still a factor though).
In the end I expect your at least ALSO going to have to buy a box from them, or an "Onlive" compadible TV, and how much extra that is going to cost compared to a TV without it of coruse remains to be seen.
Such are my thoughts, really I don't see enough hard information on this to think it's going anywhere, it sounds like a hype attempt more than anything.
Plus on top of everything else, consider also that for all the hate thrown their way and things like the "Red Ring Of Death", Sony, Microsoft, and Nintendo are all well known producers of hardware. Even Microsoft has maintained their reputation here due to their replacement policies for the 360. People are more likely to trust a Sony or Nintendo to produce a quality product/service (despite everything) than jumping into something new like this with both feet fast enough to kill anything.
Besides, almost guaranteed if the idea had any serious merit any one of those big companies would already be working on doing the same thing, and probably better.
