1) They were in browsers since 2000s. Then Steve Jobs held a grudge with Adobe and Flash took a major blow. Today, we successfuly reinvented the wheel using "open" technologies - on the client side at least, the authoring tools of Flash are still uncomparable.

2) WebAssembly, compiling the leaked HL2 code. The graphics stack is WebGL.

3) Absolutely illegal, it exists until a cease&desist comes from Valve. We may see it taken down even today. They aren't.