Is "Web Applications 1.0" a sensible starting point for the next iteration of HTML ?

I confess to having considerable reservations about
this whole Apple/Mozilla/Opera-led initiative, and
the following statement[1] /really/ causes me to wonder
where they might seek to take us :

	> Generally speaking, authors are discouraged
	> from trying to use XML on the Web, because
	> XML has much stricter syntax rules than the
	> "HTML5" variant described above [...]

Now XHTML v. HTML is one debate, but this is an entirely
different kettle of fish.  Is the Apple/Mozilla/Opera
consortium really telling the world that the existence of
strict syntax rules is a valid reason for rejecting an
emergent technology ?  I would have thought (and hoped) that
exactly the opposite opinion would obtain and advice be
given.

Philip Taylor
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[1] http://www.whatwg.org/specs/web-apps/current-work/multipage/section-terminology.html#html-vs