I think many have anticipated something like this as the natural evolution of gaming systems. Let's just hope Google, with an awareness of just how incredibly profitable a move like this could be if properly executed instead of being delivered half-baked, invested sufficient time, resources, and testing.
This could open up gaming to a large audience that to date didn't have enough disposable income to afford the upfront investment in a console or gaming rig. If they truly can provide top shelf performance and premium titles for essentially only a subscription fee, I can't even imagine the ceiling for it's success.
Making it a somewhat open system in for existing input devices is a huge plus. I also expect that with 100% of the software being situated on their servers, it could do a great deal to reduce rampant cheating and hacks that are systematic in traditional multiplayer gaming.
Definitely going to be keeping an eye on this!
A few more thoughts after a short night's sleep...
While I would love to - but don't expect to - see simple flat pricing for access to the full library of games, there's still a great deal to be said for the more likely scenario where a large array of mid-tier and not-the-latest top-tier games with the newest hits being offered as a subscription add-on.
First off, there are many times when we might invest in a game, play it for brief time, then move on - let's say it's a $60 game played for 3 months, working out to $20/month. A subscription add-on would certainly be less than that amount, generating a net savings and removing the angst about buying a game with high hopes but the knowledge that it might not be what you were hoping for, and stuck for the investment (less what you might sell it for).
Also, a huge upside of the platform as a whole, even with such premium add-ons, is the ease with which one can trial a game. A point they made about the amount of steps and time one has to put in to functionally play a demo of a game now rings true: there would be virtually no time/effort/resources invested in playing a demo or trial of a game via Stadia, vs potentially hours and GB's of bandwidth under the conventional means.
The more I think about this system, the more I like it. I hope Google hits it out of the park with this one, but even if they don't, I'm grateful they're taking a stab at it - if nothing else, it will serve as a case study for the next company to learn from.