Plugin management is actually a bit complicated, and in the case of Chrome we've had mulitple levels of it for years. The simplest is click-to-play, where the plugin is replaced with a graphic in the page that you can click to run it. This is the most convenient, but is vulnerable to click-jacking or other trickery. Then there's plugin blocking, which doesn't have the click-to-play weaknesses but is less convenient because you need to enable the plugin through a browser control (ie. infobar, page action, or context menu). Finally there's disabling, which just prevents the plugin from running at all.

For out-of-date and perennially vulnerable plugins (like Java) Chrome uses the second mode, which blocks the plugin unless the user accepts it through an infobar. It's not a perfect defense, but we've found it to be extremely effective at preventing exploits because the vast majority of the users don't let the potentially vulnerable plugin run. I'd really like to see this approach catch on more broadly, but other browser makers are understandably cautious about how they should handle plugins.