Feel like doing your photo retouching over a sluggish DSL connection? Adobe has your back; per CNN/Money, the company's flagship Photoshop will be available in a free, slimmed-down online version within six months. No word yet on specific capabilities, storage allocation, etc.
If Adobe is looking for someone to copy (or buy) for Photoshop Web, perhaps a look at Picnik would be helpful. This beta site allows most of the same transforms and fixes as iPhoto, and ramping it up to Photoshop Elements-level would probably be easier than starting from scratch. If not Picnik, perhaps one of the other sites noted here would be an acquisition target.