Storage increase in laptops:

However, there's another dimension that you've failed to figure in, that 
of overall computer size.  It turns out that at least for the past 25-50 
years (the 50 years earlier measured, or the 25 here) at least, we've 
found the practical benefits of overall computer miniaturization 
beneficial as well, such that in practice they've absorbed some of those 
OOMs you mention.  It's the oft pointed out main-frame (room size) > 
mini-computer (large appliance size) > desktop (medium appliance size) > 
laptop (small appliance size) > handheld/umpc > cell-phone > watch... 
trend.  As storage and computation increases, we've chosen to trade off an 
OOM every decade or so to graduate to the next smaller sized unit.

If the per-decade size generation trend continues, normal people won't be 
using laptops anymore in 25 or even, really, 10 years, as we'll downshift 
a size or two or three instead.  Just as trends indicate people are now 
switching to laptops instead of desktops and UMPCs instead of laptops, 
because the smaller size now has more power than the larger size did a few 
years previously and it's all the power really needed at that usage point, 
a decade from now, computers the size (and likely cost as well) of today's 
remotes/MP3-players/cell-phones will be the norm (low/high-end), while 
packing the computing power of today's dual-quad-core servers.

OTOH, we're up against the wall of the human body's I/O limitations 
already, probably the reason we didn't migrate smaller several years ago, 
when the computing power of a desktop first exceeded that really necessary 
for office applications and the like.  Some people just like a full sized 
keyboard and a nice sized display, and that human interface is *NOT* 
shrinking with Moore's law, unfortunately.

For decades, Science Fiction's answer has been change the interface, voice 
recognition and eye-glasses displays, with direct neural tap interfaces 
predicted beyond that, but the required AI and materials science hasn't 
really made that first leap practical as yet, tho it /is/ tantalizingly 
close... but we've thought that for over a decade, as well.

Still, the keyboard and large external display as human I/O method is 
simply going to have to give if we're to graduate down below the UMPC 
level.  Or maybe we'll end up with ubiquitous built-in 
keyboard/display/Internet units everywhere, and plugin/wireless-in our 
multi-terabyte-storage-multi-cored-USB-thumb-drive-sized "personal 
computer" everywhere we go, much as folks are doing with the thumb-drives 
themselves today?

Or, just perhaps, the just-a-few-years long trend of actually shrinking 
cost will become the dominant factor going forward, and those now $400 
UMPCs like the Eee and friends will be $30-50 or even <$10, while 
containing the power and storage of today's big-drive quad-core 
desktop/servers, but with the permanent data stored "in the cloud" and 
with I/O to ubiquitous permanent displays/keyboards where needed as 
mentioned above, so the individual units become disposable, like the 
digital watches one can now buy in the dollar store.

I really do think that the average person's usage really is being met now, 
thus the focus on smaller but more important CHEAPER we are seeing, and 
that that fact is not going to change -- UNLESS some "killer app" like 
truly practical general purpose (not limited purpose/vocab as we see now) 
voice recognition and hidef spectacles displays suddenly appear.  
If /that/ happens, then we'll see the drive to smaller (but with whatever 
resources are necessary to drive the voice recognition AI) reassert itself 
over cheaper, down to the point they can be embedded in the eye-glasses 
themselves.  Since such a practical general purpose voice recognition AI, 
should it appear, is likely to be fairly resource intensive for even 
today's multi-core desktops, the process of miniaturizing the hardware 
(and power requirements) to the watch-battery size point, for embedding in  
those spectacles, is going to take a fair bit of that 25 years, anyway.  
Beyond that... well, we'll just have to see where that 
neuromanceresqe "jacking in" tech is, at that point.

Duncan