A couple of points on your great article:
I don't think ITIL is struggling per se. In my experience most 'ITIL Implementations' fail (note the carefully placed quotes) because companies use ITIL as the end/objective, not as what it should be: the means to an end and an enabler of IT as it delivers the services the business needs. A lot of companies go into 'IT Process Management' mode instead of 'IT Service Management' mode. Hence, the appearance of bureaucracy and bottlenecks. It is called IT Service Management because you're delivering Services, not Processes. ITIL processes will help you deliver the services, cloud or otherwise, based on proven, repeatable activities; Implementing ITIL processes (or the tools used to support ITIL, for that matter) by themselves does not provide any intrinsic value to the organization, in my opinion.
Also. when considering IT Service Management frameworks, ITIL should not be considered in isolation. There are others that need to be taken into consideration, specially by management, to make sure IT Services delivers the value that the company's looking for. And this is crucial: if management wants to just 'do ITIL' that would be the first sign of trouble.
I don't necessarily believe that ITIL, or other similar frameworks, will become irrelevant by the Cloud. I do believe that the next version of ITIL will take into account Cloud Service and other things, but I don't think Cloud Services by themselves will render ITIL irrelevant. Organizations need to look at managing the Cloud as they look at managing other services: delivering services at agreed costs, service levels and with the value required by the business.