Dare Obasanjo makes a very good point about giving offline capabilities to online apps:

Once you decide to "go offline", your Web application is no longer "zero install" so it isn't much different from a desktop application.

True enough, but I'm still not as down on the idea as he is. Part of why I like iWork better than MS office is that it's so much lighter weight. I don't have any interest or need in all the features. I've tried Google docs, and they probably satisfy my basic needs for that kind of app as well.

Bottom line, I think the ugly reality is that most people neither want nor need the "rich experience" that Dare is on about. Sure, there are plenty of exceptions - but there's also a huge unmet need for vastly simpler apps.