The point is actually...
IBM have been working on "On Demand" computing for ages - take AS/400 or iSeries as an example. The ability to call on "more power" when you need it and only pay for it when you need it.
Having worked in the retail industry, I can tell you that for 6-8 weeks every year we NEEDED an iSeries i520: the rest of the time it was twiddling its thumbs somewhat... This project IS about saving power and money by buying a machine more than capable for everyday needs but also one that has the ability to scale to whatever demand is placed upon it. Think data centers and Application Service Providers. Remember when ASP's were springing up every week in the late 90's, well now we actually have affordable bandwidth to support this, or Software As A Service. Microsoft has been wanting to go the SAAS route for a while now and this sort of technology empowers it.
As far as the comments regarding "wasn't the internet meant to be a multi-node network..." It still will be! There would be a few of these monsters dotted around the world, thus creating a much more dynamic and scaleable network of server capacity than we currently have.
On the Sun and parallelism aspects... Yes, Sun do make great boxes but they do have a habit of being a bit Apple - that is not really working well with anything else. I once had a problem where I couldn't get a Sun box to send mail using PHP. The cause was the stdio library. The solution: to compile and install sfio (an IBM library) instead. Unfortunately that was against the AUP of the provider, so we moved to a Linux box instead. Parallelism is a very complex problem. Yes, parallelism of interpreted languages is a problem. But seriously, we are not looking at this happening tomorrow. PHP ver. 8 could be moved to a compiled language which would not only make it faster - dare I say it less susceptible to security issues or bugs?!?!
I think that IBM are perfectly suited to be the ones undertaking this research. After all this looks to me to be right up their street. iSeries has had Logical Partitions capable of running disparate OSes for a while - OS/400 or i/OS simply abstracted the layers and provided the control of resource. They have ample experience of Linux and have been advocates of Linux for a long time. They are also the mainframe and super computer kings. Roll on!