I think this a pretty the ideal way to have a bitcoin wallet. You can probably trust Amazon better than you can trust your own machine at home (Companies with much larger assets than you'll ever have are able to trust Amazon), and you can also count on something like S3 or gmail for backups.
The ability to log in from anywhere without having to install a client is really important for usability.
I wish there were a project that focused on providing an extremely secure platform (Linux/BSD distro + bitcoind securely configured out of the box, if that's even possible, or maybe a Bitcoin PaaS) for Bitcoin applications, then you could layer stuff like Coinpunk on top of that.
Absolute rubbish. Bitcoin needs to become easy to use. This is open-source, so it can eventually be turned into a full linux distribution that you can run on your own cloud server. You don't have to know shit about shit to have one of these.
Once we have that, you'll be able to run your own secure bitcoin wallet online (on a server that you own) and access it from anywhere without having to install any clients. For something like $10/month.
Unfortunately, due to the nature of networked systems, the odds of that do seem quite low unless connection security gets a massive upgrade: http://en.wikipedia.org/wiki/Quantum_cryptography
Kudos to you and spending time on this project, it looks pretty slick, but it's a horrible thing for Bitcoin in general.
If the only thing it manages to accomplish is accelerate the rejection of online wallet services then I suppose it's a good thing.