Perhaps, if you're interested in the business-level angle - but binary plugins have had a long (and blighted) history, so they're less relevant.
If you're interested in technology and creating something new using the common elements of the web, on the other hand, stretching the limits of what's technically simple javascript + canvas is indeed important.
Net effect depends on the category. Modern PC games are more advanced than 10 year old Quake 3 (which was state-of-the-art in its time).
If getting to play Quake Live would be as seamless (from regular web surfing) as it is now getting to play Flash games, it would be indeed a major progress.
But if user already has to go through the hassle of installing game-specific plugin, what is the actual difference compared to just installing regular game (downloaded from the web)?
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BTW Here is something that is a bit more innovative:
You still need to install a custom plugin (no way around this, at least till there is a hardware accelerated 3D canvas), but at least they try to do something different, taking advantage of the platform: basically you can play games in Google Earth like environment.
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And if you want something really crazy, check OTOY:
They are doing server based rendering: instead of movies they stream dynamically rendered images responding to user input (though I must say I have some doubts about practicality of such approach).
I'd be happy to say X is better than Quake Live, regardless of underlying tech -- IF you show me something better.
I'm looking for net effect here.