If you are reading single records, then I agree that Extended Ops won't buy you much. However, reading 10 single records shouldn't be much of a headache, either. The biggest issues come from cases where you have to read hundreds of records, or even scan records in a file looking for related data. For these queries, extended ops can help a LOT. IN addition, they can filter on keyed fields *AND* on non-keyed fields! Even better, you can request only portions of the records to be sent back, a real boon for drop-boxes and the like where you really only need a primary key and a display value to be retrieved.
Many applications have been written with an "application server" approach. In fact, this is how web-based applications work. I've seen this scaled all the way up to 1200+ users, and it usually works very well, especially if you've got a good application design. The difficulty lies in that you need to build a custom communications layer for a custom application. (Many avoid this by using web services (as already mentioned) or using some other built-in comm mechanism in their development environment. Some COBOL systems have very nice app-server-based solutions to consider.) So, it's not far-fetched -- just entails lots of work. IN any evcent, an app redesign is likely going to be the result. Using a web front end provides some advantages (like the elimination of custom comm code and the ability to use any browser), but this also has a learning curve for the "traditional" developer.