Yes, there's a couple performance trade-offs, both good and bad. First, as you observe, File I/O is faster than Network I/O - on a call for call basis. Howeve

Yes, there's a couple performance trade-offs, both good and bad. First, as you observe, File I/O is faster than Network I/O - on a call for call basis. However, current disk-based operating systems may perform thousands of File I/O operations per second when performing seemingly trivial tasks - dramatically slowing down the perceived speed of the operating system. Webapps do not perform thousands of Network I/O operations per second. Instead, webapp authors go to great lengths to maximize that the perceived performance of the app, even on very slow network connections. For example, Gmail perform asynchronous background network operations, so the user rarely perceives any sort of network delay - even on a very slow connection. Another significant trade-off of running webapps instead of locally installed application compiled to machine code - webapps are usually written in some combination of Flash, ECMAscript, or HTML5, all of which are much slower than machine code. However, webapp authors also go to great lengths to insure their apps perform very well, despite the slow language interpreters. In the end if the webapps are written well, they absolutely can run faster than a traditional operating system running local apps.