It doesn't handle "state" well, and lacks common GUI idioms like menu bars, tool-bars, editable data grids, combo-boxes, model dialog boxes/windows, MDI, and others. Perhaps HTML can be modified to do those well, but it probably wouldn't be "HTML" anymore.

Re: "If changes to the markup language break a library in the scripting one, its clearly the library that needs fixing."

I'm comparing the emulation of desktop GUI's via HTML + DOM + CSS + JavaScript + JavaScript libraries to something that natively handles GUI's. Those 5 parts together have proven fragile. The chain is as strong as the weakest link.

Re: "Expecting browser makers to somehow keep their HTML engines backward compatible with JS libraries isn't really realistic or practical."

That's why we need a dedicated GUI markup language and browser (or pluggin). You would be very careful about breaking GUI's if GUI's are your tool's only job. HTML (current) browser makers have a lot of other concerns. Breaking a GUI emulator library is just collateral damage to them that makes them yawn.

Those who tried to do something somewhat similar failed because they put too much on their plate: Flash and Java Applets. They tried to be entire virtual OS's, making them a hacker haven. Lesson: don't be an application programming language, don't be a compiler, don't be an OS, don't be a code editor, don't be a toaster, just be a GUI browser and only a GUI browser.