The thing about storage is that it has been virtual for a long time. So while the future is even more virtual, the past is virtual too. When we look back we see a lot of the same virtualization ideas already in place. It's kinda like Back To The Future in some ways, without the hover boards and DeLoreans.
Your desktop at home and your laptop at work are probably still more or less directly using their hard drives without a virtual layer in between, but on servers, storage arrays, filers, cloud backup, and just about any web app - storage is already virtual.
Storage has been virtual for a long time. A simple LUN is a virtual layer that takes many disks and presents them as if they were one. A LUN could also be a slice of many disks presented as one single disk. Sometimes these LUNs are referred to as Virtual Disks - depending on the vendor or tool.
Storage arrays have engaged in doing virtual stuff that does amazing things for a long time now. Moving data around to different disks without interrupting access (kinda like vMotion for data) and replicating to a different location for backup and disaster recovery without impact to the applications are great examples.
Finally all the cloud based storage is completely virtual. Amazon's storage service is probably the best example but other things like Mozy and Carbonite are cloud based backup solutions that are big virtual backup tapes in the sky.
The virtualization of storage keeps going from there. The storage functions and features are going to increasingly become more virtual. In some cases vSphere does things that were previously done by storage arrays like snapshots and cloning while in other ways the arrays will work directly with vSphere to do these same things from a VM specific perspective. The VAAI api that enables arrays to work more directly with vSphere is a great example.
So in the future, storage will be more virtual. There are two examples of things that have already been released that I think are signs of where things will go.
The first is the concept of taking local storage on servers and combining it across the network to create virtual shared storage. The vSphere Storage Appliance or VSA is an example. It was originally released with vSphere 5.0 and allows for the local storage of several servers to be combined and presented as a set of NFS shares that are highly available due to replication between the hosts that happens automatically in the background. At VMworld earlier this year there were also a technology preview uses local disks to create a virtual SAN.
Secondly is the idea of the storage arrays themselves becoming virtual machines. NetApp released a virtual storage appliance that can be used to create a virtual NetApp filer. It runs the same OnTap software that the physical based NetApp filers use. As a result this virtual filer has the same high end capabilities including stuff like snapshots and deduplication as well as the ability to NFS and iSCSI based connections.
So storage becomes more virtual and virtualization get more storage capabilities, again.