IMO network bandwidth and latency is a bigger problem than storage. Right now, I can stream [1] HD movies from my homeserver to wherever my notebook is right now, because the upstream at home is wide enough (6 megabits per sec). But that application only works because it has quite predictable bandwidth requirements and can cope with latency quite well. Many other applications would be horribly slow if every file access had a second-long roundtrip.

[1] via sshfs