This is exactly correct. But in the case of Chrome OS, the real underlying hardware is the server youre connecting too, not your local machine. So photoshop (or similar photo editing software) will run on Chrome OS, but it's going to run in a network connected piece of software using server resources.

This minimizes the need for expensive local equipment, and dramatically increases the demands of the server. In fact, I wouldn't be surprised if sometime in the future Google plans on renting their server resources based on the number of CPU cycles you use!