You have to understand the concept of properly optimized netcode and similar code like RunAhead to understand that lag (within reason) can be overcome to be completely transparent.
No, it can't. Not with today's hardware limit and technology.
The amount of possible inputs is exponential for each frame, no PC in the world and in the near future can pre-render that much.
You would need a lot of high tech clusters to negate the latency effect of a single player. That's not feasible.
Network latency won't improve either, since the light speed is a hard cap with current tech.
The only thing companies can do to minimize latency is to create A LOT (in the millions) of datacenters, which won't happen wither.
In other words, latency is an unsolvable bottleneck, for now. It will only be possibly overcome if, someday, people figure out how photon teleportation works.
The problem is the noise of people claiming they can catch a fly with a chopstick Myagi style and a 10 to 12ms (less than a frame of lag in 60hz) is noticiable.
Like someone above said, some game genres are NEVER going to work via the current cloud tech: Action platformers, Fighting Games, FPS, Racing Games etc. Whenever a single frame matters, and it's WAY MORE FREQUENT than you think, this technology is worthless.
It should be very nice for turn-based/non-reactive games though, and only those.
But that's a very specific niche, so it will fail overall.
And I'm not even getting into the ownership woes that come along with this tech.