They already did, it's called Chrome OS
P) What do you think it's kernel is? Debian Linux all the way.
Yeah, I know it's a Linux kernel - but that's all it is, a kernel & one dedicated App, no general shell, and that's just not sufficient for all implementations of an OS...
You don't need the desktop.(In house Google uses Ubuntu and OSX, no windows machines.)
It's true that they don't use Windows (for obvious & understandable reasons), but Ubuntu and OS X are still Desktop Operating Systems, so I don't really see your point there...
Both OSX and Windows are moving away from the traditional desktop to either a springboard or web.
Not quite, they're incorporating more & more elements of Cloud Computing, but if they really were "moving away from the traditional desktop" as you say, the next Macs & PCs out would be running iOS & Windows Phone 7.
Not everything can be Cloud-based, we'll still always need some native capability & servers for our networks.
For example, if someone was travelling to a location where there was no guarantee of internet access a ChromeBook would be completely useless.
The same thing goes for military vessels running under radio silence; while you could have a system where there was a wired cloud that connected all the terminals aboard to a central server, you'd still need a native OS for that server (and no military would ever go for a system with that little redundancy anyway).
Another example would be people/businesses who maintain their own networks; an AirPort base station or equivalent WiFi router just doesn't cut it for professional applications, and it wouldn't be practical to run a network server via another network.
Cloud Computing is not "the future", it's a clever tool that (as usual with these sort of things) people have gotten too overexcited about & over-hyped. It's not a total flash-in-the-pan, I'm sure it it will stay with us as a very useful utility; but it's never going to replace the need for native capabilities in any computers, whether they be "PCs" (I'm speaking generally here & including Macs with all other PCs), tablets, smartphones, or any other devices that might arise.
I'm a bit worried about everything going over into the cloud. I like to know my data is physically with me in the form of a harddisk drive. Sure, having your workflow on the web has a lot of advantages, but I'd like to have both. So I hope the Chrome OS doesn't become the industry standard.
I agree absolutely, hence why I said I see the optimum being a case where one has a full, but light desktop running in the background as a back-up, while the majority of one's work could be done via an enhanced browser (hence my example of Ubuntu with the Google Chrome OS running in effective virtualisation as an App in place of the normal Chrome web browser).