Browser vendors care a great deal about backwards compatibility. The group speccing XHTML2 didn’t.
Note that XHTML2 isn’t solving all the same problems HTML5 is solving. HTML5 is much broader in scope than XHTML2. HTML5 covers processing models, JavaScript APIs, video, audio, application widgets, etc. but XHTML2 does not.
As for expected roles, representatives from top browser vendors participate in the HTML WG but not in the XHTML2 WG. On the other hand, people showing interest in the “Backplane” are participating in the XHTML2 WG.
See also David Baron’s post about how the W3C works.
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