The future of web hosting and web site development is probably in cell phones. Everything keeps getting smaller. Remember how big the very first computers were? There is a really good article in this issue of the Hosting Standard that everyone in the industry should read. Whether it be 5 years from now or 10 years from now, cell phones will be devices that are fully integrated with your computer and the Internet. At that point, who knows if it will create a higher demand for hosting/design services or something will come along to knock it out of the ballpark.
I think most of the personal website will be host in his own house with his own unlimited bandwidth broadband connection.
I think the hosting business will be after 8-10 yrs but not vast as it is now a days.
I fully agree with this opinion that everyone may have there own PC as there server with a T1 Line (easily affordable at that time) and running lots of there own network sites.
3d holographic browser applications, as in the movie Disclosure