It's all about the tradeoffs given the constraints. Both dumb terminals and smart PCs have their advantages and disadvantages. When a single system is cheaper

It's all about the tradeoffs given the constraints. Both dumb terminals and smart PCs have their advantages and disadvantages. When a single system is cheaper (counting total ROI) than distributed systems, the mainframe approach will win. Otherwise, the distributed approach will win. The tradeoffs change from year to year and even company to company. PS -- internal web apps are essentially dumb terminals as well, and businesses have been making those since the late 90s.