a) not everyone has gigabit Ethernet?
b) people routinely want to forward GUI apps over broadband which isn't even as fast as 10MB Ethernet?
I was trying xpra last night, which does per-window X-forwarding by running its own X-server on the remote host sending bitmaps over the network, and the difference in latency between that and direct X-forwarding via SSH was very noticeable. Sending big bitmaps around networks is just crazy.
In addition, this all assumes that the server you're running a GUI app from has a video card which can do the rendering; I've been working on a server which only supports the VESA driver and X-forwarding to a workstation which has a decent GPU and a decent driver. It would be even worse if it was a virtualised server with no GPU at all.
Basing your display system on having local rendering hardware to render bitmaps that you'll then send around the network is just crazy.