Not the poster you're replying to, but I'll share my thoughts:
1. Trying to make the browser ideal for both browsing content, and rendering rich application UIs bloats the browser.
2. Time spent trying to make the browser a poor imitation of an X server is time that could go into making the browser better at, ya know, browsing. FSM only knows, Firefox could use a LOT more developer time spent on improving performance and reducing the memory footprint. (Yeah, I know, sometimes that those goals overlap. But not always, which is the point)
3. For all the talk about how X11 remoting doesn't work over the Internet, I've done it and it worked just fine. YMMV, but it certainly can work just fine in at least some situations.
4. Trying to create a rich experience in the browser inevitably leads to conflicts that don't exist in a desktop app. For example, typically the F1 key is the "Help" key. So if I'm sitting in a web application, and I hit F1, what happens? Do I get help for my application, or for the web browser? Likewise, can my app easily use the F11 key? No. And look at the UI inconsistency between web "apps". There's none. With desktop apps, most apps adhered (mostly) to one of a relatively small set of standards... CUA, or whatever. With web apps, the experience is all over the damn place.
I'm sure there are other good reasons, but those jump out to me.