> It kind of seems to me like it has been a mistake to have both of these as completely separate things - something like a <canvas> that had a standard scene graph/metafile type library with it (that you could optionally use or not) that included hit testing would make more sense. That seems to be how things are going anyway with various libraries building on <canvas>.

Well, the Web has been built on mistakes and false starts. In this case the overlap between SVG and <canvas> seems mostly harmless (except for the browser bloat). But Javascript JIT's/graphics libraries combined with hardware accelerated <canvas> sure seems to be the likely winner at this point...