I played around with it for about 30 minutes and am very impressed. You can compile the LaTeX source using the cloud or locally. Of course, I imagine there are huge challenges that the developers have to overcome. As it stands now, the many offline LaTeX development environment are far superior for those willing to withstand the semi-steep learning curve and a bit of hacking.
The bottom line is that LaTeX does not garner much interest from the part of the developer community that likes the simple web-based (e.g. Google docs) editors. I think this project (or ones like it) will help standardize the writing of academic articles with extensive math content on the web. MathJax is another project which is making the inclusion of LaTeX equations in webpages easy and beautiful.