On the other hand, if usability drops because the VMs are actually isolated - and this seems to be the approach that was taken - users will simply consolidate more applications on one machine, and infect everything at once this way.
The architecture envisions consolidating applications by domain, e.g. one for your social networking, one for banking (and that would be very locked down, e.g. http(s) only), etc.
It accepts that there will be comprise (or so I gather) and is explicitly designed to mitigate it. For me, that improves security significantly (I already do a form of this by running three browser instances on two machines).
It's a very pragmatic approach, and I can see from the lead's background why she'd take it.