The issue is that plugins must generally be written in JavaScript. It's generally felt that, at least with the current state of technology, in-browser JavaScript interpreters haven't been sufficiently vetted to trust with crypto. For more details on this point: http://www.matasano.com/articles/javascript-cryptography/
> Are we really so javascript/web programming oriented now that "plug-in" connotes javascript?
Yes, afraid so.
> I am talking about an actual application level plugin. Think flash, and silverlight not greasemonky.
This is absolutely an option. It's a tall order, because there are a lot of browser/OS combinations out there. But I believe it could be very successful.
