In this modern land of anything goes I offer what we all need is a good, solid, minimal, and highly secure PUBLIC foundation system, of which we are all made very aware of exactly how it works, much like I had to "suffer" through years of English classes. Such a system would include a knowledge of HTML, TCP/IP, and a basic windowing system. Have this core system thoroughly understood and bug-free.
If webmasters conform to this, we should be able to limit the amount of hostile code released as there is no receptor for it in our machines, however any webmaster putting stuff on the internet requiring extensions and whatever will take the same risk as those distributing halloween candy to kids.... make those "hold harmless" clauses about as effective as someone distributing razor blades in apples and handing that to kids.
That little business phrase of "<insert applet here> required to view this page" would mean that business accepts FULL and UNLIMITED LIABILITY for mischief carried an any applet he required, just as anyone passing candy to kids also accepts full liability for what is in it.. Even requiring pop-ups would mean the business requiring the pop-ups agrees to full liability for anyone misled by an errant popup - even if that popup did not come from his site. I believe by now all of us see how pop-ups can be used for all sorts of phishing work, as once some hapless user is on some business site, he has to answer whatever the popup asks to make it go away. The popup may look real, but it could be just a planted bug to use the trust a customer had for a business.
I get the very strong idea that such a move would have a very chilling effect on the proliferation of hostile code when the ones who are encouraging its vectors to be installed are also compelled to accept liability for its actions.
If there is computing to be done, that oughta be done on the server side. In my mind, the client should be considered as dumb as a bag of rocks, only capable of sending and receiving data. It seems terribly risky to me to be running any sort of arbitrary code provided from "someone on the internet".
I know there will be cries of "assigning responsibility will be bad for business", however I assert that that is the kind of business I would be better off not having.