A client/server system always lags! You don't want this technology if you are the kind of gamer that needs millisecond responses.
The trick is that you (the client) only gets the visual information send to your system, and the input commands that you give are send back to the server. This very minimal information needs to be send over quite a distance however, and it all needs to be calculated, etc. It needs quite a decent mainframe server to get everything done in time, without you noticing the difference between local gaming and their server-based gaming. And the more people on the servers, the more it starts to lag. Also, they are not going to give you this service for free. Probably their best case scenario is that they want a system like Steam in combination with server-based gaming, with fees on top. This way you can take total control of the gaming world. You can make various subscription models for this kind of setup.
No more illegal copies possible, as gaming is only possible via server-based environment. Voila!
I'm all for non-illegal gaming, but seriously, don't take a subscription with these people. Ever!
Within a timespan of now and ten years most of the peoples systems will be virtual, in hands of the gigantic companies like these. Google's online Chrome OS will be one of the first things you will see in this direction. This is no conspiracy bullshit, it will become fact. It'll be like the old days of mainframes and terminals, only now on a massive scale.
Pay the fees, get connected. Don't pay, and take care of yourself (which has limited possibilities).