Even if it kills consumer demand, how exactly does the author think the cloud providers are storing that data? This article strikes me as uninformed doomsaying.
Bulk data is going to go on spinning platters for the forseeable future, and whether those bits are being stored on consumer's harddrives, or cloud provider harddrives - the disk manufacturers are making money off it.
In fact, since cloud providers know their business is over if there is a high-profile data-loss incident, they're likely not using unreplicated consumer disks (while consumers, as far as I can tell, will generally use exactly that - or maybe mirrored consumer drives if they're less reckless) - so their cost per GB is higher, before even considering the expense of their data-center or their bandwidth costs. They'll of course have higher utilization than a consumer drive will, but the point is, this isn't going to destroy the disk manufacturers!
Which brings us to why it's not going to fly - consumers are cheap, and storing large amounts of data in the cloud isn't...
2TB drives can be had for $100 - half a cent per GB, and prices are back on a nice downward trend. Sales of cheap and cheerful home NAS enclosures are booming. Most of the cloud storage solutions, on the other hand, seem to be charging $0.10/GB/month. Twenty times more, in a single month, than harddrive costs, total. The annual electricity cost of running the extra HDD comes out to $5-8 per year per drive, less if you enable power-saving (4-7 watts, 8800 hrs per year -> 40-60 kWH/yr at 13 cents/kWH).
So, assuming you buy a pair of 2TB drives and run them in RAID 1 in a $100 NAS enclosure, and use half of the available capacity, you're looking at $15 of power per year and a $300 initial investment. $330 over 2 years...
Storing 1TB of data in the cloud would cost $100 per month, so over two years, the cloud user has spend a whopping $2400 - almost 8 times as much as the user with a NAS drive. Say we instead used SSDs - $350 per half tb, and put 4 of them together. $1400+200 for 4-bay NAS enclosure - it's STILL cheaper than cloud storage! And, maybe worst of all in this kind of economy, when the user with cloud storage loses his job, and he can't pay the monthly fee - there goes his data.
For the forseeable future, cloud storage is only affordable for a relatively small volume of data that needs to be synced across lots of devices (particularly mobile ones, since they can't take harddrives).
The threat to disk manufacturers isn't cloud storage, it's SSDs - they will push low capacity drives out of laptops, and push high-performance HDDs out of the enterprise, and move on from there.