Since these are so small I don't see why we couldn't have a "demoscene launcher" with a "mailto:" style protocol handler and just let people click on base64 encoded links to start the demo.
Then I agree completely, and must have misunderstood what was proposed by a handler. Typically a handler will launch an external application such as mailto, ftp, magnet, etc.
If we want to run code in browser there is WASM.
So is the proposal that it would it be beneficial to have a DOS-like OS or x86 emulator in WASM for running COM files?
Yes, that would be better and more sandboxed than dosbox running outside the browser.
(author here) I didn't know about that one. I use http://twt86.co/ (no music there too, sadly) On both websites the performance is rather bad, but that is something that time will solve for us :D
I tried something similar with a 4K C64 demo recently in my emulator, basically percent-encoding the program to run right into the URL instead of hosting it somewhere. It works, but only up to about 2.5 KBytes (good enough for 256 byte demos though).