Why insane? I mean, you're welcome to your opinion, but you haven't presented any arguments for your position.

I find it incredibly useful. The alternative is normally using Microsoft Word, and emailing each other versions of the document, that need to be merged by hand.

I'm worried about privacy. Even scientific papers need to have reasonable privacy before publication, that you do not have by using somebody else's hosting.

More useful would be using latex and some form of source-control like git or svn hosted by you or your organization.

The odds that you or your organization will do a better job of Dev Ops than Google are effectively zero. You'll leave some port open that you shouldn't, have an easily guessed password on a router, forget to update a kernel, you won't set up two-factor authentication...

I'm not sure about "insane". Over the years I personally moved from a dedicated TeX workstation towards using a Wheezy stable qemu virtual machine with TeX Live and Texmaker. From there, a server-side online compiler isn't really too far off.