I think a web based killer is very far away in the time line. I recently was trying to make a huge gird in Photoshop and my i7+10gbRAM computer was unable to handle it. I think very simple stuff like annotating and cropping/red-eye fix can be done but I think a web based photo editor will fail when huge performance is required.
Not sure what your exact setup was, but your graphics card might simply have run out of memory. Which would then have happened pretty much independently from the software you were using.
