Nvidia is already having issues with major publishers pulling games saying they don't have a license to install and use them that way. It'll be interesting to see how it plays out.

I fail to see how it should be any different legally. If I pick up my pc and put it in a datacenter and stream the video output that would be perfectly fine.

In this case the game is already installed on the image/server belonging to Nvidia. Perhaps hundreds or thousands of times. And I suppose they did pay for those copies and the argument is that it's like you are just borrowing their PC to play a game. But I think the counter-argument is that this is more in the realms of "performance" similar to how you can't just buy a music CD and play it in a bar for an audience.

I have no idea what the legal ramifications really are, but I don't think there's anything morally wrong with the service they are providing. If companies really believed in the whole "selling a license" thing more of them would be willing to provide cross-platform copies for free once you own one instead of grabbing another sale.