This is a little techie, but I wonder: is Google just replaying the old "centralized vs. decentralized" game in a different way? After all, people wanted their own computers with their own applications and data for reasons. What makes the Web so different than the old legacy mainframes? And, once Google applications start running on the client, they're no different than Microsoft applications--and, they'll probably start being held to the same standard.
I think people accept Google's simplicity because it works for Web apps, and people appreciate their Web applications being quick and snappy. The same isn't true for client applications--people expect those to be robust and feature-rich. Sure, I might only typically use 1% of Microsoft Word's capabilities, but when I want that other 99%, I want it. I use Word because it has a very deep feature set, even if I don't use it most of the time.
The next few years should be interesting. I think some poeple are writing Microsoft off far too quickly.