The functional equivalent to this is iSCSI, which as far as I understand is similar to if not literally what AWS uses under the covers for EC2 block devices.
Back when disk-SSD hybrid storage was still a novel idea (~2006), one of the guys at Sun had an interesting demo with ZFS.
He first created a bunch of storage pools on a server on the east coast from iSCSI volumes on the west coast, install Postgres, and did a benchmark. He next created a pool with the same iSCSI pools but added a local SSD as a ZIL/zlog device (for caching), and ran the same benchmark.
The SSD-enabled pool has quite close to local-disk performance of a SAN.
Depending on your compute needs, it could have made more sense to do fully-remote X.
So if many people were running intensive like MATLAB or Mathematica, then root/swap-over-NFS made sense so that you could use your local workstations local CPU all to yourself(s) and not bog down the central server. If most people were doing modest things (xterm, mail, browsing), then running everything on the central server and displaying it on dumb X11 terminals wasn't a bad idea.