Why the bad iPhone web app experience keeps coming up in Epic vs. Apple
theverge.com
theverge.com
I was also fine with Safari never offering support for Flash or Java applets.
That being said, if Luna actually works then that is an existence proof that game streaming (at least) is possible on iOS Safari.
Refusing to implement finalized web standards unilaterally holds the entire web back and it's a real dick move. Especially when you consider a quote from their HTML5 showcase back in 2010: "Standards aren't add-ons to the web. They are the web."
If Apple doesn't want to ship a browser that supports web standards, then they shouldn't be shipping a browser at all. It's a massive conflict of interest for them to prevent you from installing competing browser engines while simultaneously shipping a subpar browser.
It seems fairly obvious to me that their expressed concerns are merely a convenient cover story for the real truth -- they don't want anything that even smells like competition to their App Store on iOS.