Heh, yeah that's why I don't like the term "cloud" at all. I now understand what you're doing, but I would personally be quite concerned about latencies this way.
I mean before ARM I would have thought about getting a VPS or so, now I use an ARM at home and can't see the need for the "cloud" any more. I don't use this for X/graphics, but mainly file , http, print, torrent services.
Also some people think working with stuff like google mail is cloud computing. It's a buzzword really.