How is this different in architecture from HP's WebOS?
In Principle they are the same idea, except WebOS uses the lean webkit engine to render the desktop, while Firefox OS, uses the resource hogging Geko engine.
As a former Palm Pre Plus and Firefox user, I am a poster child as to why this is a terrible idea. I switched from Firefox to the webkit based Chrome because it was the was so much leaner and faster. I also had to leave my webkit based Pre, for a NATIVE powered iPhone. And while I dearly miss WebOS's beautiful and intuitive UI, I do not miss the dog slow performance one bit.
Why doesn't Mozilla invest their limited resources on making a lean browser that can compete with Chrome?