Office products are a cash cow for Microsoft. I don't think they will stop selling them for very long. They just need to find a way to eliminate the XML files.
The biggest problem is that they would have to release a version that would not be compatible with the files created by the 2003-2007 versions of Word.
It will be interesting to see what they charge to access the web versions. I do not think it will be free. Microsoft is not known for goodwill or reasonable pricing.
"Democracy is two wolves and a lamb voting on what to have for lunch. Liberty is a well-armed lamb contesting the vote." -- Benjamin Franklin