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Yes I am aware of thin clients. What I don't understand is why somebody would want to buy a thin client to access a PC that is both more expensive and possibly less powerful than the client itself.
What are the specs for an entry level thin client these days? 2C/4T, 4GB RAM, 32GB eMMC for ~$300?

Thin clients make sense to give remote access powerful hardware that you own and control. I'm not understanding the pitch to use a thin client in order to access weak hardware, which you're renting from a competitor.
What data is so important that you need to store it on a dedicated VM that can be accessible from "anywhere" but so unimportant that you do not want to secure it on your own equipment?

Is this service for people who need to be constantly be changing between burner VMs on equipment that is shifting between different locations around the world?
As said earlier, this is not for individuals.

A call center with a couple hundred seats, all identical.
Move the administration and management from a local server up to MS and its cloud.

I could easily see this working for a lot of companies.
Absolutely would not work for me, but it will for some.
 
It's already about 20 years old and used extensively in corporate environments - just M$ are bundling it up in their own service.
The underlying tech yes, but this offering has a heap of extras on top as it is basically managed remote desktop as a service. The end user will get a similar experience, but the admins get far more flexibility and power out of the box without huge investments.