Client-side Code vs. Web 2.0

As a developer who specializes in client-side applications, I can't help but be amused and somewhat puzzled by some of the types of web-based applications people come up with. A great example are web sites that help resize and crop digital photos. There are actually a bunch of them out there; a few that were recently mentioned on (one of my favorite sites lately) include and

They seem to be missing the point. How could it possibly be better to upload a 5-10 megapixel image to a site (which can take several minutes per image even on a very fast connection, as upload speed is usually constrained much more than download speed), have the server resize it, and then download the resized image be better than using a client-side application to resize the image almost instantly, and with full interaction and nearly instant undo? Also, how can these sites afford the bandwidth costs?

Is this a usability issue, or has the world simply gone mad? :-)