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FHE is far too slow for any practical use. In a few more years, things might be different, but for now anyone marketing a practical FHE solution is probably lying.

I'm still trying to find performance numbers that prove it impractical. Otherwise, it just sounds like a problem that could be mitigated by clustering.

Here are some results from a research team that has been on the forefront of FHE implementations; note that this has been improved on significantly since last August, but you are still looking at minutes of computation for relatively small functions:

http://www.iacr.org/cryptodb/archive/2012/CRYPTO/presentatio...

Also, throwing "clustering" at every problem is misguided. Not all problems are easily parallelized:

https://en.wikipedia.org/wiki/P-complete

Don't forget Amdahl's law and Gustafson's law on the limits of parallelizing when the problem isn't P-complete. Either way, I disagree with your conclusion that it is misguided.

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