Certainly an option; keeping the syntax recognisable helped rather than hindered adoption, which was slow enough as it was at the beginning.
JS+DOM could have lost to Flash rather than vice versa.
I don't think that JS+DOM beating flash/java has much to do at all with "gee, this looks superficially like java, but is different enough to trip me up in rather weird ways".
In order for that to have not happened, it would have had to be so unpopular that Microsoft would decide it wasn't worth adopting, but still popular enough to get Microsoft on board with the general idea. I just don't think that is likely; people would have sucked up a scheme-based javascript even if it was a tad unfamiliar; it was that useful.
(Not to mention, going with the cynical "three E's" theory of 90s Microsoft, they would have at least first adopted it before perverting it.)
I think people overplay the importance of being C-like. AutoLISP hit a bit earlier and found a very strong following in a non-programmer niche. People doing web development were already fucking around in HTML of course, so clearly they could wrap their heads around things over than curly braces.
microsoft had visual basic in the browser, working like php works. that was microsoft's vision, which would have been the web if netscape didn't still have significant market share. IE had to implement javascript to be compatible with pages written for netscape.
simple as that. just microsoft's famous "embrace, extend, extinguish" strategy at work.