You ponder the likelihood of Microsoft cooperating with such a venture.

Here's the nice thing about Microsoft - they're a corporation. They do what will make them more money. They are not in the certificate-signing business. They are in the operating system, office, server software, and development environment business. It is in their interest to commodify everything that doesn't currently (or potentially) generate them more money. I can see a few problems, but nothing that can't be avoided if implemented in the proper order.

Of course IE is an exceptionally inferior browser lacking in core features (tabbed browsing for one) and all reports indicate its internals are a complete mess so it won't be the number 1 browser for too much longer. Also consider that Microsoft won't be the #1 OS company 5 years from now. So if there are problems, I see no reason to wait on them.