This is a great idea, but there are way too many hurdles I think for it to work well.

1) Exclusivity. Microsoft and Sony will still want their exclusive rights to their games.

2) If this does take off and start well, lots of competitors will pop up and the the first hurdle I just mentioned will come into play again for these type of services.

3) Internet speed and lag. I really don't know how you can stream entire games without any lag, so this really confuses me.