As far as idioms go, it's as good as any. "Cloud computing" != "disributed computing" -- it's on-demand virtual hardware and storage. That's how most users of cloud think of it, in my experience.
I was hugely skeptical of the cloud concept -- sneered at it, even -- until i started doing the cost/benefit analysis.
On-demand virtual hardware and storage is Infrastructure as a Service. I'd be willing to bet that most developers think of that when they think of the cloud (since, as you point out, they're actual users of the cloud).
But then some marketer somewhere (I'm guessing Salesforce, but that's my own bias :) decided that any web application could call itself "Cloud" (since "Software as a Service" was no longer cool. Again, I'm blaming Salesforce for flogging that horse to death...). This way, even normal people can use the cloud/buy cloud services, and it's just as easy as using the Web since it's really just the Web! (Way to go, smart and savvy Internet^H^H^H^H^H^H^HCloud user—you're so much smarter than everyone else and can expect to get promoted over/laid more than your coworkers still using that ancient Web 2.0!)
The Wikipedia article on Cloud Computing is a good illustration on how vague the term has gotten, especially how ill-defined all of the sub-classes are: Platform as a Service, Application as a Service, Service as a Service. Pretty much anything on the Web can be made into a definition of "cloud" somehow.
I'd really like to see Cloud Computing only applied to things involving immense elastically scalable computing and storage that can be provisioned and taken offline immediately, but I don't think that's going to happen. The meaningfulness of the term has been destroyed by the rampant "me-too"-ing of the industry.
I was hugely skeptical of the cloud concept -- sneered at it, even -- until i started doing the cost/benefit analysis.