This is actually really cool. It is essentially "safe" activex. I wish MS would have done something like this rather than silverlight.
There is also open source implementation of Silverlight, but not at par with Microsoft one: http://www.mono-project.com/moonlight
But outside of that, "substantial lag time"? In my opinion the mono team has always been exceptionally fast when it comes to implementing new features in the .NET world. Plus mono has its own tool sets and features that aren't in the regular .NET framework and wont be any time soon.
I am not saying that Mono is the VM I'd like browsers to implement, but my reasons are definitely not related to it not being able to come with the ASP.NET framework.
Except perhaps in chromebooks. I could see how they'd be useful there.