This seems to be forgetting the need to render other site's content. That's the main reason for iframes to be used, as people need to render ads, email previews, games, and so forth, without potentially breaking the rest of the page.

The "extremely awkward" aspect they complain about is a side effect of needing to handle that case.

You could add some nicer way to include content for the same domain, but I suspect having two highly similar HTML features would be fairly awkward in practice, as you'd have to create a whole new set of security rules for it.