I wouldn't go so far but, yes, anything that requires updates for every frame cannot effectively use cloud. However, there are non real-time scenarios where cloud can be leveraged.
One example is a traditional RPG scenario where the player approaches a town or village that's home for hundreds of NPCs. If the game detects the player is within a certain distance of the settlement, the game can query the cloud infrastructure to (pre)compute AI behaviours of all villagers. These villagers may have interacted with other players, so their behaviours may be different. When all that pre-computation is done, the data is downloaded onto the console's HD where it can be accessed locally.
More specifically, suppose if player X spreads rumors to some villagers about player Y. That would / may affect how the townsfolk behave toward player Y. This information is uploaded to the cloud. Later on, as player Y approaches the settlement, the modified NPC AI would be downloaded and the game will make use of the data as normal. In other words, player X has indirectly affected the single-player experience for player Y. If I were to design an RPG, I would make use of cloud in such a fashion. It would enrich the game experience by adding a 'human touch' to NPC interactions which would otherwise be based on fixed patterns.