The former can be done more efficiently in dedicated hardware, which is also bound to be cheap. I suspect that this could apply to the latter as well. Just take the most common operations, such as the ones supported by iPhoto on OS X and support those in hardware.

There may be no such thing as a computer that's too fast, but there's also computers which are too hot, too heavy, too bulky, or useless because they no longer have power.

I'd like a cheap thing with the form factor of the MacBook Air, which can also act as a virtual terminal to my Smart Phone. The amount of computing power on a current smart phone is way more than enough for a majority of work-related computing. Add in sync backup of the smart phone to the cloud, and I think that would be ideal. You'd have none of the disadvantage of cloud computing, plus all of the advantages. You'd also have all of the advantages of the phone/pocket computer form factor, but none of the disadvantages when you need a better input device.