I agree that the term “OS” is perhaps a bit strong (indeed we’ll always need software to run our chips) - what I meant was “the really significant part of the OS” is disappearing. A driver does not affect society in same way as an office suite, for example.
The gOS website, as pointed out by Taco, is perhaps the best example of this slipping away.

I tried to edit the article very slightly according to the comments.

It’s just a case of being shortsighted, even a bit naive, albeit innocent due to ignorance.

I quote:

We recommend Google for just about everything… Gmail, Gtalk, Calendar, Maps, Docs and Spreadsheets, and more. We’d like to welcome you to the idea that Google already is your “operating system.”

And a bit further on, in the section “Open source and other values”…

To get ahead of ourselves, we’re saying goodbye to closed software and the digital divide.

Goodbye closed local software, hello closed remote services. What a joke.

An operating system is the software that makes the hardware do what an application requests. As a result, both applications and hardware are useless without operating systems; it will never be possible to run an application directly on the hardware (unless such an application has a built-in operating system, but in that case I’d say “the operating system ships an application”).

What has been really changing lately is that we are now able to do many tasks on the web, while many people were used to do them locally on their computers.

Web applications might replace most of the binary applications of our computers, but there are two components that are never going to disappear: The operating system and a client to access these web-based services.

If operating systems are going to disappear, then hardware and applications (be they web-based or binary) are also going to disappear.

Cheers!

I personally don’t like leaving everything to Google or Yahoo or anybody. If I am to have a server oriented lifestyle then those would be my own servers.

So.. extend that to a larger scale and you get a business idea of, instead of hosting people’s emails and other web applications directly, you simply offer them easy to manage servers in which they decide what to install and what to enable, with your help if necessary. In other words, it is their server and so they have control over their own private data. If they want to erase something or move it off the server, they can do so.

In other words, the only SaaS model I like and accept is one in which the service provider is the user itself and the company is merely an infrastructure and consulting/support provider.