Less latency is badly needed, but it won't be enough to be a viable alternative to gaming on dedicated hardware for many years.
It probably won't be ever. There will always be a limiting factor due to the speed of light and all that.
‘Viable alternative’ doesn’t mean ‘at the same level as dedicated hardware at home’.
If you’re capable of using a cloud service to play your favorite games without much additional lag, it’s a perfectly viable alternative. It doesn’t have to have the same visual features as native.
There’s folks happily playing Doom and Destiny on Stadia.