Yes, that could happen, if OnLive leaves
security holes in their local servers.

But Even when someone has the full server code,
he must also make the server-infrastructure available to
let other use the service.
Hobby pirates will not build huge free server farms,
(you need at least 10.000 high performance computers
to have Crysis work for 10.000 players at the same time)
and commercial pirates (that offer such a service) cant
really use it as they stand in public. - they will rather
develop their own software or licence it.