Ah, but Javascript IS becoming a compiled language. Check out Firefox 3.5 with TraceMonkey. It's insanely fast compared to um you-know-who's browser. It's true that JS will never be C, but it's a much more dynamic language than C is, and in many ways that makes it more expressive and powerful.
As far as HTML goes, I don't think that the lack of validity of HTML is a huge detriment to speed. I think the engines that put together the visual representation and manipulate the DOM need to get a lot better (um, IE, I'm looking in your general direction...). CSS compliance needs to get better, and CSS itself needs to get more powerful. (Get on the bus with CSS 3 people!)
But I do think that speed is going to get better on Firefox and Chrome to such an extent that people really ARE going to start using it for mainstream application development. It's funny. Adobe seems to be selling Flash as their platform for dynamic web content, MSFT is selling Silverlight for dynamic web content, and Google just wants to really improve HTML and Javascript to display dynamic web content. And Google's doing pretty well at it so far, I must say...
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