[skar]

I think it's like a turf war inside MS and the existing IE team managers wouldn't like to lose their position of strength and the no.of developers working under them.

Also the browser is taking up more of the OS capabilities, like threads, storage, GPU acceleration and so on. So MS would be reluctant to let the browser become too strong. But the horse has already bolted and there's always Linux, Android, Meego etc for the browser makers to cater for the netbook, tablet, smart phone markets.