While that approach certainly worked for browsers that supported plug-ins, it didn't help for the increasing number of browsers that aim to be plugin-free.
This inability to natively access the webcam without relying on 3rd party components was certainly a gap in the HTML development story. The W3C has been attempting to fill this gap by encouraging browser vendors to implement the proposals outlined in the Media Capture and Streams spec.
Watch Live Shows of Stranger people all over the world.
Accessing your webcam via your browser used to involve a...pardon the profanity, a plugin. In order to connect to a webcam and gain access to its video stream, you had to rely on something primarily created in Flash or Silverlight.
You can still develop and test locally (or via localhost), but you won't be able to test it "in the wild" unless you are on a secure HTTPS connection.