One of the basic ideas about thin clients is that no information should be stored locally on a client. In order to simplify administration you do not want anything on the client, no information, no software and no operating system.
There should be no locally installed software. This is fundamental for thin client philosophy. Software needs maintenance, upgrades, service packs, etc. Multiply with the number of clients to get the whole picture.
What differs between an operating system and software? Nothing, in fact an operating system is just another piece of software that needs maintenance. A thin client solution that involves any local operating system on the clients is not to consider as serious.
Given the policy of no local software and no local OS, what use is there for a local hard drive? Correct, you do not need a local hard drive. Consequently, there should be no hard drive on a thin client. A hard drive on a client is an indication of local storage and local maintenance. This holds for all hard drive substitutes as well, such as flash-disks or memory cards.
Furthermore, hard drives are probably the most vulnerable piece of hardware found in a computer. By not introducing hard drives in your clients you drastically boost reliability and increase their lifetime as well.
Zero Administration is another buzzword introduced by a major software vendor. With no local storage on the clients you have reached the true meaning of Zero Administration for all your clients. The only kind of attention a thin client might need is when someone accidentally has unplugged the power cord.
By applying the policy of no local storage you eliminate a whole bunch of potential security holes in your network. Each client with a local storage represents a potential target for both viruses and intruders. With no local storage on the clients you only need to focus all your preventive work on the server.