The article makes a few interesting points.
One thing I disagree with, however, is replacing the entire desktop with a browser. The problem this solution is attempting to solve is valid, however the implementation is terrible.
He's got it backwards: It's not, "The Desktop is the Browser", it should be, "The Browser is the Desktop". The desktop has evolved the way it has for a reason. And it should be noted that the desktop is not a series of static tabs that replace each other when clicked. The Window metaphor has served pretty well for the last few decades because it mostly works. It will be enhanced and modified and eventually replaced, but it is still pretty solid.
The desktop would be able to fetch applications online and cache them in an Applications directory for re-use, meanwhile displaying them just as any other native resident application would be, in a way that is consistent and familiar to users. In a recent interview Mitchell Baker, Firefox's CEO, claimed the company is expecting to support offline web application usage. This means something similar to the WHATWG Web Application 1.0 spec where web-programs can save local sessions. The browser is already moving in this direction, we just need a better way of tying and presenting it to the desktop and users.
The trend of web applications and dev technologies such as Microsoft's recently introduced Silverlight and Adobe's Flex--and of course Mozilla's Application Framework that has been using XML-based UI markup languages for almost a decade--are moves that support this idea.