You're conflating two issues, method of delivery and method of payment. There are a number of very successful desktop app that are SaaS (Dropbox and Evernote co

You're conflating two issues, method of delivery and method of payment. There are a number of very successful desktop app that are SaaS (Dropbox and Evernote come to mind). The reason that SaaS is so popular is that it provides a much more predictable and reliable income over one-off sales.