To more fully quote the Chrome PM:
You didn't solve the problems devs find challenging. Frameworks do. The existence of frameworks on the web is a feature, not a bug. Developers mostly don't want the assembly language of the web, they want their chosen frameworks to have excellent DX and the UX they produce to be fantastic.
We're shipping container queries, scope, nesting, style queries, state queries and a host of other features devs tell us they need to architect component systems
In other words, the Chrome team (today) assumes the use of frameworks as a given and sees their job as empowering frameworks. Note that "devs" here clearly refers to framework authors, the sort of people who architect component systems. She doesn't mean app devs.
So HTML as an all-inclusive app framework is going to die, arguably has already died, and the argument between Hixie and stubbornella is just an argument about what specific way to empower framework authors. Hixie argues that the focus should be on features for big frameworks that skip HTML entirely, stubbornella argues for features for smaller frameworks that still use some HTML, but they're both in agreement that raw HTML is just kind of useless and not the way devs want to go anymore. After all "state queries" is not either. There's less between these positions that may seem.
Now the real question is not could browsers theoretically ship really great HTML widgets. Sure, there's no rocket science in GUIs, in theory, browsers could do this. Yet after 30 years of immense effort they don't do so. That suggests some deeper structural issue. It might be team scalability issue. Chrome has a truly enormous team, but clearly they're struggling to do everything people might want from a browser. All that code has to be maintained after all, so as Chrome gets bigger we should expect them to slow down. Since the death of plugins the web is a completely monolithic platform. Given a choice between implementing some API that only a browser developer can do (e.g. WebUSB) or implementing an API that devs can hack up their own alternative to (a widget), it's clear why they always choose the former. Anything that browser makers can push off to web developers they clearly will, because there's so much to do that can't be pushed off in that way. Hence why HTML is still a poor UI toolkit and why JS frameworks are so widely used. It's a division of labor issue.