Cloudy cloud

It was an interesting introduction of Cloud Computing (and bunch of things bout AWS) by this Amazon guy on last Monday. I did hear about this Cloud thingy from some google video before but had totally no idea what was it about. I did a few research online and I found that this technology is not actually something novel or new, just that the same technology we've been using years being repackaged in new way. From my point of view, Cloud is just a giant server, cut into pieces and distributed into different physical/digital locations, with higher performance and (they claimed) better security system. IMO, no matter how they emphasized on the better security using cloud and etc, it still possesses and generate security concern especially about privacy and reliability. I'm sure this whole cloud thingy had brought a lot of attentions from hackers all around the world, giving them more reason to challenge the so called unchallengeable. I'm also wondering if it's not only provoking more cyber terrorists, but also exposing itself to "physical" terrorists. Wouldn't it be possible for terrorist to consider taking the cloud as hostage since MANY important stuff stored in a few (or perhaps many) physical servers , of cause provided that they manage to locate where they are which seems to be very possible for them since they can even put a hole in pentagon and take down the Twin Towers. I had actually found an article regarding the terrorist risk on Cloud here :

Could The Cloud Lead To An Even Bigger 9/11?

No doubt, this cloud computing thingy will be another BIG thing in the near future (or perhaps we are already there). The main question here is are we actually ready for it?