But they don't have to use the cloud. Meaning native apps can (and in my experience do) leave data on the device which in turn means the user experience isn't seamless from device to device. You're so focused on the technical aspect you're missing the philosophical side of this which is the important part. By forcing app developers to use the cloud you create a guaranteed seamlessness and that's the whole point.
Web apps don't "have to use the cloud" either. (there are APIs for local storage)
I don't dispute that the "web apps only" approach his more "pure". My prediction is simply that the Android approach will win out because users value functionality over purity.
Part of the reason web apps aren't saving much data locally is because they don't have anything to save (where's that API for accessing the camera?). BTW, the fix for native apps saving locally is to make all of the local storage automatically sync into the cloud, much like dropbox does (and like iPhone does with all of the app databases when it syncs). I think that's how the Sidekick worked (which was also created by Andy Rubin).
Web Apps don't have to use the cloud - I suppose it's possible for a web developer to decide to locally cache all an application's data but it seems like your grasping at straws here. It would require a developer to specifically disregard the overall philosophy of a web based apps and a Cloud OS. Don't get me wrong. In my perfect world Google would force developers not to do this but as it is I don't think it's something you're likely to see much of (my understanding is that Google is focusing on SD usage for media just to prevent this)
On users value of functionality - Again the question comes back to one of "what functionality will they really be losing". Particularly with WebGL and Flash both available to developers I really don't see a functionality gap.
Forcing Android to the Cloud - If you just desperately want to save Android you could absolutely do this but what's the point. If you're going to force everyone to the cloud and you can build your development environment around web based tools than why wouldn't you? More to the point why would Google spend a bunch of time and money turning Android into a Cloud based OS when they already have a Cloud based OS
I'm not trying to "save Android". I'm simply predicting that Google will continue developing and improving it because they are already shipping millions of Android devices and it has immense strategic value to them.
