First of all, this thread not meant to discuss the technological challenges a developer would encounter creating such a game. There are virtually none. In my 2nd year at university I created an engine for this purpose that ran on all then-current browsers fluidly using a 800x600 display window. It's just not an issue. Or at least not an issue that can't be overcome if a developer is willing to invest some time optimizing the engine.
A bit of background: An adventure game is at it's core simply a matter of layering images on top of each other and even InternetExplorer is very much capable of layerering the typical 4 full size layers and a number of splite-type layers without running into performance issues.
So here's a little FAQ about the technology first.
Q: Browsers are not able to render such a game fast enough
A: Browsers are very much optimized for the exact type of drawing an adventure game needs and can easily render most scenes even on slower computers.
Q: Browsers can't offer sound and video like a normal application
A: All current browsers include some form of video and audio playback. Sometimes this is in the form of a default video plugin that's available in the browser (Internet Explorer/Media Player plugin), sometimes it's a native engine (Firefox, Safari), but there's always something.
Q: You can't play these games offline
A: All modern browsers can by now via special offline storage (think Cookies on steroids). Internet Explorer needs the Gears Plugin in order to do it, though.
Q: Browser games can't run fullscreen
A: While web applications can't control fullscreen mode, all current browsers have one and applications can rearrange content accordingly when the user enters it.
The issue here is whether users would actually care about it and how it should be funded. (No I'm not planning on doing one right now, this is just scientific curiosity).
[*]Zero launch time
[*]Quick switching to other applications
For me that would be enough to actually prefer it running inside the browser to a dedicated application, but that's because most of my work actually happens in the web browser.
So, what are your thoughts?