Here's an internet based digital audio workstation (DAW) from Power FX:

Soundation

I haven't used it but it looks like a neat concept.

Very limited.

Limited in what way? While it's not comparable to Logic 9 or Pro Tools, people have made hit tracks with much less. For example, Gorillaz recently released an entire album of songs that were made on an Ipad. The days of desktop applications are numbered.
Ipad produced album