Most of my career's been spent on desktop or embedded systems code and I'm a relative newcomer to web programming. Despite the horrors of server-side development (debugger? ha!) it's so much faster to develop web services than traditional apps. The main reason is that I have control over far more of the environment when the code is running on my own box and I'm only relying on a client to display the UI. The testing matrix for Apple Motion was insane because it ran on the GPU, every piece of hardware behaved differently, and so as new graphics cards and machines came out the combinations we had to check exploded.
So, I have a lot of sympathy with Microsoft, and the Xobni folks doing client-side processing, but this novel-length KB article on troubleshooting Outlook crashes sums up why users are so happy with web apps, despite their limitations.