Re: What changed - the network
Amazons server farms are still too far from the endpoints for low latency and it's unlikely they're equipped with suitable hardware for even casual gaming. Building out more distributed server infrastructure runs counter to their current concentration in datacentres but Amazon could afford it.
My personal belief is the shear crapness of the Onlive experience was only part of why it failed, the market it worked best on (mobile) just wasn't interested in more than native gaming. Actual gamers didn't accept the performance. If you overlook the rented aspect, the passes were pretty good value, yet few bought in.
I'm struggling to see this as a sales driver. More of nice freebie that most will ignore, while passively consuming video.