The problem with Linux re: applications is that Linux communities are openly hostile to software being delivered directly to the user by a developer, and to proprietary software as a whole. That's the real problem. Applications will come if it becomes a sane platform to build and distribute applications for.
I don't see that as an unassailable problem, though. There is no reason someone shouldn't develop a solid desktop platform that is built on Linux, has a user-friendly UI, but instead of a typical Linux distro today where you just install everything from your distro's huge repo of FOSS, you install it directly (perhaps with some kind of handy UI to track what you have and facilitate updates) and/or get things from a potentially commercial "app store".
In fact, Google has already proved that this model can work, they just did it on mobile devices instead of traditional desktop/laptop PCs. Traditional Linux communities coexist quite happily with the Android ecosystem and largely independent of it, and I see no reason conflict would be necessary with a different style of Linux desktop either.
