Really, the whole browser plugin idea is a grand, failed experiment.
So, for example, Flash as a browser plugin is a failed experiment? I think not. There's reality and then there's idealism. Nothing wrong with the latter, but the former is pretty much unaffected by it. If you believe in it strongly enough, you can attempt to change the reality. Build something and see if enough others find it worthwhile. Kind of like what these guys are trying to do with WebVision. Even if the project you reference was hugely successful, there's nothing wrong with competition.