Rather, it sounds like they are trying to properly abstract the isolation technology away from any specific implementation. They then realized that this would also allow "Qubes on the Cloud" with relatively little extra effort.
From a personal choice standpoint, it seems we will still have the option of avoiding cloud zones completely if we so desire, so no harm there.
If we think about the sociology of security however, lowering the barrier to entry seems like an overall win, assuming we believe in the Qubes security model.
It's a lot like fingerprint readers on phones. Sure, they're not near as strong as a high entropy password, but they're convenient enough so people who previously never locked their phones now use a fingerprint lock.
Cloud is just a way to distribute computation, and make sure storage is always available to you. Everything should be assumed to be protected — I mean, they protect video memory among processes/apps, you’d bet they protect your data on the cloud.
Edit: OK, I take it back. Replacing VMs with discrete devices on local networks is very cool. I just wish that they'd emphasized that, and then talked about using cloud resources. Indeed, what boggled my mind is that someone would go through the hassle of learning Qubes, and then put some of it in the cloud.