Is cloud gaming dead or OnLive?

Cloud gaming service OnLive this week entered a form of bankruptcy and layed off "over half" of its employees. The usual internet kerfuffle broke out, with accusations flying in all directions, as employees discovered that receiving company shares isn't much of a benefit if that company is broke and will never reach the IPO. During the explanations some interesting numbers emerged, like the company having 2 millions registered users and 8,000 servers, but people actually playing

World of Warkraft...