We have been developing pdf.js in the open (on github.com), albeit quietly, for about a month now. We were waiting on the completion of some major features (Type1 fonts, gradients, etc.) before communicating pdf.js more broadly. We've been taken by surprise by the early and intense interest in our work, so we decided to blog and talk about our project earlier than we initially planned.
This is a truly awesome idea. It has so many benefits that it's a total no-brainer. Not only does it remove the need for a third-party plug-in or readers, but the built-in reader can also leverage web features such as HTTP range requests. On top of that it also means a unified user interface for dealing with PDFs, and possibly makes handling PDFs found on the web a lot safer as the documents can all be sandboxed within the browser. Also, the open-source nature of the implementation should make is more secure (more eyes on the code and all that).
This could also be an awesome feature for mobile platforms.
Check out pdf.js in action here. It's not perfect but it's still pretty neat and shows a lot of potential.
Bottom line, it's a feature all modern browsers should have.