No, it's because Applets, like Flash, are a narrow, specific, proprietary setting. Nobody has ever questioned that Java can handle something like that.
The interesting part here is that it is showing that browsers and JavaScript, with a very different approach than Flash or Java, can now handle this sort of computationally intensive, graphics intensive application without any OS-specific plugins.
getting code to work is easy, getting the largest most influential tech companies to cooperate on building a platform for you to deliver applications that work on most devices in the world entirely for free with no real financial incentive.
yeah, but as people have noted this doesn't work on anything other than the latest builds of chrome and safari. Still impressive but this is not exactly a compatibility win.
But this is an implementation based on open web standards. It'll eventually work on mainstream Firefox, Safari, Chrome, Opera and maybe (if <canvas> is supported and planets align) IE9.