We need a good flamewar in here.
Thus! Object-oriented programming: Does it suck or what?
But that's only one way of looking at it. The state is the IP and instructions/data. But what does that state represent? You could do the exact same thing with functional - freeze the machine, copy over all the algorithms, and restart it. A computer may be all state, but so is a rock. It's what that state represents that matters.
I understand where you're coming from, and to a certain extent I agree. When confronted by most real-world problems I have no idea where I'd start with a functional language. I just disagree that functional is useless. Witness the Lisp Machines (now dead lol).
There are certain other benefits to the elimination of explicit state: it makes automatic parallelization and concurrency considerably easier. This will probably become increasingly more important in the future.
In theory, that's only one of several ways to look at it, sure, but in practice, you've got bits in RAM. You can pretend it's something else, and implement everything you need for this, but that won't change the fact your computer is one big state machine.
Parallelization is important, though, and a pain in the ass when dealing with state. You're definitely right about that one, and I'm inclined to agree we'll be seeing more parallelization in the future. Physics is gonna start kicking our asses pretty soon when it comes to hardware design.
It'll be entertaining when the standard answer is no longer: "get a faster CPU."
Therein lies another pet peeve of mine...