We've recently shifted to developing directly on a development instance on EC2 and haven't looked back. The IDE we use supports editing over SSH, so we simply treat the machine as if it were on our laptop. The best part is access anywhere. Last week I set up a local-only development box and everything was going swimmingly -- until I needed to work from home. I realized just how amazing being able to work from anywhere truly was.

There needs to be a balance. If I can't use my IDE on a chromebook, that obviously won't work. But if I can have access to my tools locally that manage remote service and data -- I'm golden.