For consumers, online storage is a lot about convenience -- one of the key values which consumers will pay for, and in this case quite possibly on a reoccurring basis. There's the convenience to access files from anywhere. And to share files with others groups or even with the public. And to have someone else deal with back-ups. Forget buying a NAS box for backups -- backup to a service. What enables this trend to occur is simply network bandwidth availability. It certainly wouldn't have been feasible with a modem dial-up ISP.
It's worth thinking about other trends to which cloud storage is very complimentary. Netbooks for example, are targeted for mostly online activities, and as such are well suited for use of cloud storage for user files such as photos, videos, songs, etc. If a lot of storage needs of user files can be pushed to the cloud, then the requirements of netbook local storage goes down or doesn't need to grow as rapidly (end of the Moore's law of consumer storage). That shifts the suitability curve of flash memory storage products (like SSDs), accelerating its adoption in netbooks. The same can be said for any PC platform, for that matter. Which would mean that HDD storage growth will shift from consumer products to the server dimension, where it's utilized by cloud storage providers.
What will be interesting to watch play out, is how each cloud storage vendor handles security. For private storage, consumers will want an option to secure their files with no less exposure than they have with a local drive. And at the same time, if smart-caching of well-used files is done well (even across boot-ups), we'll have a very functional cloud storage model with relatively few trade-offs.
Disclosure: no positions