If that's how it's supposed to be used, bravo for Microsoft. It's about time. You don't have to just trust Netscape and Microsoft, you have to trust Frobco. If the applet's running in a secure environment then the worst that can happen is that a security hole in the design and implementation of that environment is used. That means you have to keep up on one vendor's position on security.
Every applet needs to be secure.
For applications, this is harder. A phreak can put all the Microsoft Word exploits on his web page he wants, but they won't do anything until you download and view them. And the potential legal liability for FrobCo, if this causes damage, is real. No, security is too important to be implemented and reimplemented by dozens of separate garage developers writing Microsoft Explorer applets. I see a great future for product liability lawyers and security consultants, though.