asks: "With all of the difficulties (both technical and legal) caused by binary graphics card drivers (e.g. the nVidia drivers) the question naturally arises - why is it necessary to have all of this logic at the 'kernel' level in the first place? Why couldn't the necessary logic be abstracted on-board the nVidia/ATI/etc card and just have the OS use one generic driver to access the functionality in all of them? Use OpenGL or similar standards on the software side, and have the card handle things on-board from that point on down? That way, hardware manufacturers wouldn't have to listen to all the flack about binary drivers, and Linux users don't have to suffer with second-rate graphics and/or deal with binary drivers in an open (and dynamic) environment. Are there technical reasons this isn't practical? Or is it simply that it's easier/cheaper to do that type of work in the OS?"
There are several issues that currently make such a thing impractical, but the large hurdle at this point is that there doesn't seem to be any interest (neither commercially or technically) to make such a leap.