This isn't the best option as far as quality, but cool, nonetheless. If you have VLC installed on the remote computer and ssh to it from a terminal, you can run the following command and get video streamed from the remote web-cam to your terminal in ascii art. I stumbled across this cool feature when trying to do what the OP is doing with a command that works locally to open the camera with VLC.
Locally, this will open a window with video streaming normally from your web camera:
[me@myComp /some/dir]$ cvlc v4l2:///dev/video0
Remotely, first ssh just for a remote terminal, then run the same comand
[me@myComp /some/dir]$ ssh person@otherComputer
...
[person@otherCompter /some/dir]$ cvlc v4l2:///dev/video0
vuala, ascii video from the remote web cam. If you zoom the terminal out, you get better resolution, but worse frame-rate. There's a happy medium somewhere in there - just fiddle with it some. Anyway, not high-quality, but still awesome!!
Note, to stop the feed, I've had to ssh to the remote machine in another terminal and kill vlc from the command line.
[me@myComp /some/dir]$ ssh person@otherComputer
...
[person@otherCompter /some/dir]$ killall vlc