If you've ever tried to build/work on a text area replacement, you'll know that it is an insanely difficult task. Highlighting and manipulating text sounds fairly rudimentary, but each version of each browser has enough bugs to keep a deveoper occupied for weeks with little to show. (I speek from experience.)

I think Google might have the right idea; the new version of gdocs completely ignores the browser's built-in (broken) selection and editing abilities and instead uses pure JavaScript listening for mouse and key events.