This forum looks like the best place to have the discussion. The article text is right here, and O'Reilly should be a reliable host to store our ideas.
Also, you raise important points regarding security, state management, and the need to think about network protocol design. The success of the Web OS will depend in large measure on the capabilities of the protocol.
Regarding client side software, the thin vs. thick debate is a good one to have. How much runs on the client, and how much on the server? The approach proposed in the article entails a gentle transition from today's locally installed applications to a Web OS. So, clients will start out thick, and become thinner.
How thin will the client become? That depends on the application, and the preference of specific users. Such flexibility is the attraction of the free Web OS. Some users will choose to run almost everything on a local PC. Others will set up in-house servers, and run thin clients. Still others will contract with an outside provider (or several) to host the applications. If the components are open, and can run anywhere, then there are many possibilities to create the right environment for everyone.