As an alternative to what the original post posits, we could leave it for that purpose, and design another (now XML) application for user interfaces: windows, buttons, scroll bars (if desired), text controls (no I'm not talking about textarea for CGI), the kind of controls that Windows or X11+MOTIF provide, expressed as tags in a UIML (User Interface Markup Language). This would have the advantage that we could start from a clean slate, and the open source interpreter for this technology could be integrated into all Web browsers, so behavior would be identical.
UIML would be designed as an XML application for networked software applications' user interfaces.
Of course, you could execute them locally, too. There could be graphical UI designer of the types that already exist, e.g. Visual Studio would just write out a UIML as a new export format.
Crazy idea? Actually, it's just applying the "Do one thing, and do it well." mantra to XML <-> XHTML + UIML instead of packing everything possible into one now-bloated markup language it was never designed to do. So if this comment had a title, it would be "I'm betting on Internet standards" (plural).