For a long time I used to think the W3C held the future of the World Wide Web in its hands. However I have come to realize that although this may have been true in the past the W3C has become too much of a slow moving bureaucratic machine to attract the kind of innovation that will create the next generation of the World Wide Web. From where I sit there are three major areas of growth for the next generation of the World Wide Web; the next generation of the dynamic Web, syndication and distibuted computing across the Web. With the recent decisions of Mozilla and Opera to form the WHAT working group and Atom's decision to go with the IETF it seems the W3C will not be playing a dominant role in any of these 3 areas.
In recent times the way the W3C produces a spec is to either hold a workshop where different entities can submit proposals and then form a working group based on coming up with a unification of the various proposals or forming a working group to find come up with a unification of various W3C Notes submitted by member companies. Either way the primary mechanism the W3C uses to produce technology specs is to take a bunch of contradictory and conflictiong proposals then have a bunch of career bureaucrats try to find some compromise that is a union of all the submitted specs. There are two things that fall out of this process. The first is that the process takes a long time, for example the XML Query workshop was in 1998 and six years later the XQuery spec is still a working draft. Also XInclude proposal was originally submitted to the W3C in 1999 but five years later it is just a candidate recommendation. Secondly, the specs that are produced tend to be too complex yet minimally functionaly since they compromise between too many wildly differing proposals. For example, W3C XML Schema was screated by unifying the ideas behind DCD, DDML, SOX, and XDR. This has lead to a dysfunctional specification that is too complex for the simple scenarios and nigh impossible to use in defining complex XML vocabularies.
It seems many vendors amd individuals are realizing that the way to produce an innovative technology is for the vendors that will mostly be affected by the technology to come up with a specification that is satisfactory to the participants as opposed to trying to innovate by committee. This is exactly what is happening with the next generation of the dynamic Web with the WHAT working group, with XML Web Services with WS-I and in syndication with RSS & Atom.
The W3C still has a good brand name since many associate it with the success of the Web but it seems that it has become damage that vendors route around in their bid to create the next generation of the World Wide Web.