You nailed it.
You only missed the part about the alternative being worse. "Genuine innovation" means you are going to have mostly crap, with some really nice stuff that gets ignored by the masses. Remember, technical excellence is not what drives success. If you don't agree with that, please explain why bg is a billionaire. Or Zuckerberg, for that matter.
Any mass market industry is going to require standards and regulation as it matures. Some mass market industries require standards in order to mature. It's easy to forget, simply deregulating the Hz coming out of the wall would screw up most of our computer infrastructure.
So in the java and browser situations we have everyone's gramma or whatever dependent on this software. These are not the places for innovation that breaks everything. If you want a wild-west internet, fine, cage your own. The rest of us would much rather spammers die, and banks don't.