This has puzzled me for years. They are very highly developed lifeforms, but they're only found in saltwater. There aren't even any freshwater cephalopods. But it isn't hard to imagine cephalopods frolicking on dry land like the tree squid. If snails have made it by developing lungs, slime and a foot suited to overland locomotion, why can't their relatives? They had millions and millions of years to do it.
Maybe we'll see land snails developing tentacles and lens eyes over the next eon.
Anark: The 'neural wiring' of cephalopod eyes is, if not better, certainly more logical than that of mammalian eyes. The reason is that, evolutionarily, the cephalopod eye developed from the outside in: a photosensitive spot became a dimple, then a camera obscura eye and finally a lens eye. I know much less about the mammalian eye, but it developed from the inside out -- it descends from brain tissue, not skin tissue, in layman's terms (I use these because I am a layman). Thus, the optical nerve in a human eye needs to connect to the outer side of the retina, whereas in a cephalopod eye, it connects to the backside like any sane electrical engineer would do it (does your TV's antenna cable come out of the screen?). That means that cephalopods haven't got a blind spot, but mammals do.