But if you move the camera to the ground, the clouds disappear. I am now thinking that it's a bug, which is why you can't be on the surface, and have the clouds affected by a Distance Shader.
In fact now I am sure of it.
In your file, if you invert the blendshader, then move the camera just above the surface of the clouds, everything looks good. THen go below the surface of the clouds, and the clouds disappear.