This is (before len chimes in!) similar to the situation with X3D — I actually think the fragmentation of X3D browsers is hurting the perception that it’s viable, because no one vendor has gained enough traction with the mass market.
But both are actually quite capable solutions.
X3D vendors have been less concerned about the virtual worlds markets they pioneered in the last eight years. It hasn't been a particularly well monetized market outside of games. Therefore, the perception of it being fragmented isn't that apt because it is fragmented along application lines. The interoperability of the content has been fairly good if by no means perfect. Even so, for anyone who worries about the cost and maintenance of 3D assets, X3D/VRML players are the only technologies that still render the content of their customers over a decade later. Staying power may not mean much to virtual world vendors, but to the content owners, it has to or those virtual economies have all the value of a CitiBank financial instruments.
So far no one has really made much progress in the so-called 'metaverse' initiatives. The interests of the major vendors such as Adobe have been to capture and hold marketshare. Shockwave has passably good looking 3D and worlds such as "Sherwood" provide decent shooter gameplay in a multiplayer environment although I'm not a fan of Adobe's standards politics through their licensing.
It is an industry that talks standards but never creates them. I conclude as I have before that the industry doesn't want them and their customers don't think they need them. The death of Lively with its shockingly fast reincarnation in the VRML-based newLively should be waking up some customers, but with the economic situation paralyzing all of the furries in the headlights, reactions are slow and unfocused.
But it is interesting to read Koster say that X3D is a 'quite capable' solution. That is the first statement along those lines from a respected 3D technologist that there is possibly a 'second life' for the only real standard technology we have in this market.