Watermarking in the browser seems counter productive though.
But using this to generate a watermark and upload it to somewhere like S3, to then display on pages is pretty sweet.
For instance, this might be utilized by a CMS plugin to support uploading images, watermarking them, and shipping them off to the cloud.
An potential image thief could just make his browser not run the watermarking function if he wanted. What we are essentially doing here is handing the image thief an image, and then handing him a watermark, and then telling him to watermark the image himself (with no guarantee that he will actually do so).