I think HTML5 is not enough for a lot of more advanced stuff, which if this happens, will drive development more towards technologies like Silverlight and Java for things that are more advanced.
The security aspect
A more serious concern is the security aspect. Desktop applications have easier access to local resources, and for a reason. What if a web application gets rights to directly access your file system, printer, soundcard, screencard, web-camera etc? Of course this will be controlled by security features in the browser platform, but this is something that will be more accessible for hackers if the technology allows access to these resources through a web interface.
And what if you loose your internet connection... You will not be able to run anything on your computer! With desktop application, you can at least write documents, spreadsheets etc. without being plugged in...