it's not the quantity of applications that that you can't natively save to the SD card, it's the size of the applications themselves, like thebizz says, it's 3d games that can become large if devs really want to take advantage of the more powerful handsets (droid for now, but a decent amount of snapdragon based phones are on the horizon)
and unless you can save them out of the box, it's not going to become an attractive market for devs to invest time in, so rooting is no a real solution in regard to the viability of the market for developers who want to make money.
hopefully the talk of google looking in to this earlier prove true and we get the feature in a 2.x update.
as far as chrome goes, i could see it replacing android in places where android really shouldn't be since it doesn't seem to make much sense there (laptops, ereaders, etc) the larger screens and more powerful hardware would seem better suited to something designed for it, rather than shoehorning a mobile OS into them.
but i personally don't see it making much sense as a replacement to android. they will probably work very well together as google moves more and more of our data into the cloud