It's not unreasonable to imagine, if things continue going the way they're going, that people won't need operating systems in the traditional sense anymore. All they'll need is a web browser. What needs to happen for this to become reality?
- Online file storage and management systems need to become mainstream, usable, and cheap/free.
- More desktop applications need web-based equivalents.
That's it. Considerable advances have already been made on both fronts. Office software is already moving (tentatively) to the web. See google docs for example. There are also repeated attempts at online file systems - nobody's got it quite right yet, in my opinion, but it's just a matter of time.
So, could the OS become a thing of the past? Could it become nothing more than an uppity web browser? I think it's a distinct possibility that sometime down the road, that will be the case. I frequently hear rumors of a Google OS coming out. I don't think we're ever going to see that, because Google is looking to the future and they see that the web is the next big operating system. And they're frantically developing software for it before everyone else realizes the same.