"although hosted Photoshop is meant to be a low-end product, the company intends to ensure that it is of a higher quality than free alternatives...If we offered a host-based version of Photoshop that's Photoshop-branded (and is) potentially better than Picasa, you'd probably go the Photoshop route because of your belief in the Photoshop brand and the quality associated with the brand."With revenues being generated from advertisements, Adobe is offering this version of its powerful imaging software for free. However, Chizen also notes that it will not have all of the functionality of any of the other products in the Photoshop family.
Because of their rapid growth and knowledge in the world of online apps, Adobe sees Google as their largest competitor in the market and are making a move to establish themselves as a strong force in this arena. I'll be interested in seeing what a web-based Photoshop will look like.