If Microsoft does this right, they've pretty much just killed the browser as the de facto means for rendering web-based applications.
The irrelevancy of the browser was already fast approaching because of the advent of web services. IMHO, Windows 8 will accelerate this further.
I think you have overdosed on the Cool-Aid. The browser will be around many decades to come, in fact the browser will become the OS. Most people will upgrade to 8 and turn off the Metro crap and download Google Chrome.