Let me start with saying that I'm biased. I work at Eagle Eye Networks, a Cloud Based Video Surveillance company. Also, we're owned by the same person that owns Brivo.
As you may have guessed, I'm a big believer in cloud, but I also realize that it's not a fit for every situation. An example I often use is you probably wouldn't buy an 18 wheeler when you need to landscape your yard, and someone who is building a road probably wouldn't use a pickup truck to haul the asphalt. I don't believe any one approach, or product, is the answer to all situations. You choose the right tool for the job at hand. That's why home depot sells 35 different types of hammers.
With that being said, cloud is the right fit for a lot of situations. If you look outside of the physical security industry, it's hard to find a business system that isn't moving to the cloud. Mail, CRM, Accounting, Phone Systems, Expenses, Employee Management, Data Backup, and others are all in the cloud now. If you want a reference, here's a recent article from Forbes about the growth and adoption of cloud computing ARTICLE
Will Cloud ever dominate the physical security market? I don't know. Selfishly, I hope that it does. When will that happen? I really don't know, but I remember being at ISC West in 2010, and having someone ask me if I thought IP cameras were really going to replace analog. I don't want to get in an IP vs Analog debate, I just want to point out this isn't the first time in recent history there's been a debate about how a specific technology is going to take over another one.
The increase in cloud system adoption is happening, both within physical security as well as without. Like most technology adoption, it is slower in the physical security market than in other markets, but that doesn't mean that it won't happen, at some point.
I don't believe that cloud is going to solve all of the world's problems, or even just the challenges of video surveillance. There are certainly people who will never use cloud, you get that with any technology. (My grandfather swore to never use an ATM, he wanted to always deal with a human when he went to the bank.) What I do believe, is that there are many integrators and end users that benefit from a cloud solution and those numbers are growing.