Why do we distribute applications across multiple systems today? Is it because we like managing multiple systems? No! It's for scalability. We exploit the fact that tiers of a multi-tier app have different processing loads and scalability methods. Typically, we scale the web/app tier by throwing more servers at the farm while we scale the data tier with bigger servers. However, as Moore's law increases the performance of these machines, the need to scale becomes reduced, From my experience, many smaller apps could easily run a single machine today (esp. when you consider the increased efficiency of eliminating the network and process hops). Moore's law will continue increase the headroom these machines provide and expand the definition of "smaller apps". If you can run the app on a single hardware node, there'd be little reason not to run as much of it as you can inside the database, other than "we might want to scale this out someday".
I wonder if these guys have ever heard of Gemstone/S?