The government does, in fact, hold onto people’s grant application data – aren’t there rules for retention? However, I understand if grants.gov doesn’t have the resources to support it and must, instead, just feed the data off to the granting agency.

But that perhaps answers my question that grants.gov could never handle cradle-to-grave grants needs if it’s simply the broker of such information.

Personally, I’m in favor of the e-forms solution playing second fiddle to an online application mechanism, much like FastLane. When Grants.gov started up, most grantees were not familiar with either e-forms or web-forms. Nowadays, though, most people are much more comfortable with web-based forms and it’s e-forms that present a learning curve.

In addition, with contemporary technologies such as AJAX, a rich web interface experience is possible (Google Maps, GMail, Basecamp, Salesforce.com and many other apps demonstrate this) so there’s no argument against the feasibility of this approach.
But the government doesn’t want to host people’s grant application data — either in draft or submitted form — wherever possible. (NSF is okay with it; other agencies are more skittish.) So we’ll need to see a change in thinking there before this option becomes truly feasible.