Cloud based VR would be the future?
As other people have mentioned, due to network latency issues, I think that full rendering on a cloud server and streaming video to a client device is unlikely to be workable. Even if the latency can be kept low enough in a best-case scenario, it would only work for a very limited number of users with very high-quality internet connections. (Don't forget that e.g. in the USA, there are still tens of millions of people on dialup or DSL, with no access to cable internet, let alone fiber. It will be decades still before fiber is widespread.) Also, note that many cloud gaming services do exist, but that according to players, input latency is noticeably worse on these services than playing locally on a PC.

However, all that being said, rendering entirely on a cloud server is not the only way to approach the problem. The most latency-sensitive aspect of VR is head tracking. Oculus's "timewarp" technology shows that you can quickly and cheaply update a previously rendered image to respond to head rotation, as a 2D image operation: if the user turns their head to the right, you shift the image to the left, and so on. With a depth buffer, you can do positional timewarp as well, although this creates various artifacts with parallax because it's based on a single-layered 2D image.

Timewarp is certainly cheap enough to run on a mobile device. So, one approach is to render frames in the cloud, stream the video to the client, then timewarp the video on the client device to obtain very low-latency head tracking. This wouldn't help the latency of other inputs such as keyboard/mouse/controller inputs, but those don't induce nausea when they're delayed, the way delayed head-tracking does.

There are also other possibilities along the lines of splitting rendering between the cloud and the client. For example, object-space lighting and shading could be done on the cloud and streamed to the client as textures; then the client only needs to render simple textured geometry. This would work better than positional timewarp for getting correct parallax when you move your head around, though you'd still have some artifacts with specular shading and reflections. There are a lot of possibilities for offloading rendering to the cloud in VR-friendly ways.