You guys don't understand, this is not for us this is for the masses.
We are the geeks, the techies, the troubleshooters, the guys who get the latest and greatest in technology even if it isn't standard yet or if we have to meddle with the innards of our tech intimately.
However we are a minority.
The masses which includes your grandma, aunt Betty, little bro or your girlfriend don't want to spend time and energy going through the hassle of endless installation menus with endless options, installing drivers, configuring their PCs, installing patches, upgrading their PCs to meet the software requirements (if they know what that means), etcetera. They just want something easy, painless and that just works, as simple as that, so simple even 93 year old grandma can do it.
And that's what is gonna happen because they are the majority even if it doesn't make sense for us and we feel the software model is the way to go.
So if I had to put my money on it I would say it will be the app model.