Don't you need a certain amount of computing at each network node anyways to see what to do and where to send the optical signal next? In additional to error correction/amplifying the signal?
Generally you only need to read the 'header'. If that is little enough computation maybe that can be done optically, gaining the advantage of not needing to convert twice.
Often it might be as simple as routing right wavelength through right path, as in WDM systems. Optical amplifiers, such as EDFA [0] are interesting thing, too.
