It seems to be due to a fundamental disagreement between Alan Kay versus the people (primarily Tim Berners-Lee) who designed the web, about how such a system should work.
The ideal browser, according to Kay, should really be a mini operating system with only one task: To safely execute code downloaded from the internet. In Kays design, the web does not consist of pages, but of black box "objects" which can contain any kind of code (as long as it is safe). This is why he says a browser shouldn't have features. A browser wouldn't need say a HTML parser or a rendering engine, since all this should be implemented by the objects. This is also the reason he doesn't seem to like standards. If content is not rendered by the browser but by the object itself, there is no need for a standard.
Obviously this would be immensely more powerful than the web today where pages are constrained by the bugs and limitations of the current browsers and web standards.
The philosophy of Tim Berners-Lee, the inventor of the web, is almost the exact opposite. The document "The Principle of Least Power" outline the design principles underlying HTTP, HTML, URL's etc. He points out the benefit of limitations. For example, having a well specified declarative language like HTML is easier to analyze, which makes search engines like Google possible. Indexing is not really possible in Kays web of turing-complete black-box objects. So the lack of constraints on the objects actually makes them much less useful. How valuable are powerful objects if you can't find them? And without a standard notion of links and URLS, Googles page rank algorithm couldn't work. And neither would bookmarks for that matter. Of course the black box web would be totally inaccessible for disabled users also.
Another issue is content production. Now we have various tools, but even from the beginning any amateur could learn to author a html page in notepad. This is what kickstarted the web and made it spread like wildfire. Consider if the only way you could make a web page required you to start programming you own rendering engine? The barrier to entry would be immense.
Java applets and Silverlight resemble to some extent to Kays vision. Both systems are much more flexible and powerful than the web (since you could implement a browser in them), but suffer from the problems outlined above. And both technologies are basically dead in the water.
Tim Berners-Lee was a computer scientist who had experience with networks and information systems before inventing the web. It seems that Kay does not understand the ideas behind the web, and therefore he believes the designers are amateurs without knowledge of computing history. But Tim Berners-Lee certainly wasn't an amateur.