This is exactly what I have been looking for! Rich text editing in webpages is complicated, and I haven't find a good solution until now. Google doc ends up with thousands of divs and span elements, TinyMCE uses iframe. While both of them seem to work, they are not elegant and sometimes I experience bug with incorrect text cursor location.
Another reason I like about canvas implementation is the flexibility. I have been working on a text rendering engine for Japanese for some time, and found that DOM is simply not good enough for special layout. Here are some examples:
1. Writing direction. CSS does have the writing-mode property, but that doesn't work well in different browsers.
2. Ruby tag support in vertical writing mode sucks.
3. No browser supports hanging-punctuation yet.
More to be listed... It should be the browsers' job to fix these problems, but anyway, I finally end up with using canvas to calculate the position for every single character, that gives me flexibility that DOM doesn't have.
Keep up the good work!