- They've already made a huge investment in the Trident engine which is now standards compliant and works fine.
- It would break backwards compatibility with existing websites since you'd have to recreate the issues in IE7 for its compatibility mode
- MSHTML is used by a lot of programs, introducing the CLR will introduce problems like if the program already uses the CLR, but uses a different and incompatible version to whatever "IE.NET" uses
- The NSAPI and ActiveX plugin systems are here to stay. Adobe and Apple aren't going to bend over backwards to make a managed interface for Flash and QuickTime respectively.
- Works fine? Are you seeing how it is losing in almost any comparison with FF or Chrome, speed and compliance wise? Maybe that is the problem with IE - its developers think it "works fine".
- Just as FF or Chrome doesn't break backwards compatibility, why would a new MS browser be any worse of than those? If people want to view websites that can only work in IE8, let them keep IE8 installed (side-by side).
- There is nothing preventing MS from creating a stand-alone browser that does not replace, or even use, the current MSHTML renderer. keep MSHTML as is for all the reasons you list.
- ActiveX - keep using IE8 if you need that. Introduce a better plugin API with the new browser.
At some point the current IE line needs to die, and MS needs to create something better to replace it. Other people are creating better alternates. I am a long-time IE user and supporter, but it is getting harder and harder to justify staying with it. Its performance compared to other browsers is just plain pathetic. MS should fix it before everyone abandons it, unless they are fine with that outcome. Maybe they don't care about the browser any more. That is also fine. But just let me know in that case and I'll switch now instead of hoping things will get better somewhere down the line.