Virtualization, ISPs and the future

I attended a free lecture at SKT (visit their website here) on virtualization solutions for businesses. Now, I've been aware of virtualization for a while, but never really dove into it and the possibilities. The variety of options available now are fascinating, such as creating numerous virtual workstations on a central server so that workers or students log on with a thin client (a very small computer with all it's resources set to connect to the server. Much cheaper in the hardware, software, electricity and maintenance costs) or a repurposed PC (one that no longer has the capability to run newer OS's or software). There are numerous applications of this for a business or school alone. However, what got my wheels churning was the talk of using virtualiztion to push the OS from the server to a PC. The idea struck me that if the option is available, could ISP's set up a system where you sign up are given a netbook that when you turn it on, gives you a login which, once the customer logs on, gets it's OS from the ISP's server. Speaking with the presenter to confirm if it was a viable option, he confirmed that yes it is, and yes there are ISP's working on such a scenario.

Now, this idea scares me to death from a privacy and freedom standpoint. Imagine all of your documents, pictures, music, all stored not in the hard drive you your home PC or laptop, but on the ISP's servers. Don't pay your bill? All gone. ISP thinks you're downloading illegal media? All gone. Government wants to search for terrorist threats? They don't have to come to your home or hack into your computer, they just have to go to the ISP. We've already seen some inklings of the potential with this type of situation with Amazon deleting copies of 1984 and Animal Farm (oh the irony) from people's Kindles because the books were put into the Kindle store by people who lacked to proper rights to do so. (NY Times article here)

Another concern would be the implementation of web filters on the virtual desktop, disallowing access to sites that the ISP doesn't like. Think the Great Firewall of China and the arguments for maintaining net neutrality. (one starting point source here)

Am I being too gloom and doom? I really don't know. Imagine that instead of investing $4-500 for a new pc, paying your ISP $50-60 a month that includes internet service and the netbook. Imagine the majority of people not understanding that their files aren't really there on their computer. As has been said, eternal vigilance is the price of freedom.

My initial searching around isn't finding any details about who is working on this and what stage they are at, but it is a concern. If any readers have any details, please post links in the comments and let me know. I'll keep poking around and let you know what develops.