That's pretty hypocritical of Mozilla. About a year ago, they were flaunting similar ambitions[1] and actively working on Screaming monkey[2].
Quote, "Mozilla is developing a plugin for Internet Explorer that will add support for the HTML5 Canvas element. Microsoft's attempts to stifle adoption of open web standards could soon be circumvented by plugins that bring Firefox technology to Internet Explorer."
This sould be nuanced. Screaming Monkey and the Canvas plugin are drop-in replacements. The Chrome frame is optional, and could possibly interfere with cookies or history handling (although I'm not sure it's the case). The problem raised by Mitchell Baker is that it would make it very hard to "manage information across websites". Did I hear XSS and tracking cookies?
Chrome Frame lets IE handle cookies and history and all that. XSS and tracking cookies keep working as they always have. Chrome frame uses the IE network stack to ensure this[1]. The canvas plugin and screaming monkey were both intended to be implemented using tags[2].
I expected a better response from Mozilla than this.