This is very exciting, as it opens up a lot of opportunities.

Firstly, gaming hardware is expensive, especially if you want the latest stuff. My desktop computer is quite powerful, but I haven't had time to turn it on even once these past couple weeks. Making a big pool of hardware available to anyone on a time-sharing or seat-sharing basis makes gaming a lot more affordable. Of course, this only scales to hardware, not licenses. This is a big plus for just about everything, from environmental consideration to GPU demand. Except maybe investment in consumer-oriented hardware.

Then, there are the new possibilities offered by both, more powerful hardware, and centralized servers. As well as anti-cheat measures, and new financial models that can be explored. Bigger servers, fair latency, better splitscreen, etc. Are just a couple.

Since it runs on Linux+Vulkan, this combination will get a lot of favourable treatment over the next months, which might mean more native games, and at the very least better engine support for those open technologies (which is great for future-proofing, portability, etc).

AMD will likely benefit a lot from this, and virtualisation tech can be improved further as a byproduct.

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On the other hand, it comes with a lot of disadvantages, and endangers the status quo:

Dematerialization is very dangerous for game preservation: cloud-exclusive games or features, games that can no longer be played after the license expired, or they became unprofitable to maintain, etc. This is a very powerful form of DRM.

Modding community will also likely suffer from this, as there is no way to modify a game that runs on a remote server (ideally).

Of course, you will need a decent internet connection to play.

This will increase user monetization (and tracking). I am afraid that with google's reach, we could see a lot of Stadia exclusives.

And of course, Google gets to say what's allowed on their platform and what's not.

Gaming might actually be one of the reasons why we still regularly see powerful computers around us, and not just smartphones/tablets/mass consumption devices. It's a limiting factor in the migration to an "all-cloud" life, anyway. So google wins on every front with this move, and could see the "desktop marketshare" start dipping again, and/or make powerful hardware harder to come by for a consumer.

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On the bright side, VR might be the redeeming actor, as Stadia will never be able to play those games, which will maintain a baseline of Gamer PCs and traditional game publishing. On a less bright take, it looks like VR is going to be mostly used in professional environments in the next few years, and might end up confined in VR arcades.

For now, I personally think the possible drawbacks outweigh the advantages, and will refrain from using it. I think it would globally beneficial if it finds itself a niche, with no exclusives. I would even be willing to pay for that. But the prospect of another Embrace, Extend, Extinguish tactics is way to dangerous, so I would try not to add myself to the number of customers they can leverage.

As an aside, I would really like to be able to share my untapped computing power within my circles, and have my friends do so as well. We would likely need far less powerful hardware if we could pool this together, as a federated cloud. I guess the blocker here is trust, and algorithms to distribute workloads.
Working on idempotent encryption algorithms and proof-of-work-like verifiable computing (check that the output is a valid compilation result, without recompiling ought to be doable) could alleviate some of the trust issues, and the second part will likely come naturally anyway.