Thor,
Why don't we call a spade a spade?
You are rather humorous! But I can be humorous, too: why don't we call a folder a folder?Seriously, though, the interesting part is indeed not the self execution and not the HTML in Local zone. The more interesting part is the HTML file as folder. Considering that the typical Microsoft OS user has no clue what a MIME type is (and, for that matter, does not know what HTML is, and doesn't know about zones), do you think that having an HTML file be announced by the operating system's GUI as a folder is a Good Thing or a Bad Thing? I would suggest that it leans more towards Idiot Engineering (http-equiv's term) than Trustworthy Computing (MS term).
Stuart