Not going to touch this debate, but I do want to respond to one early comment:
Undeniably, the simplest possible interface for installing a downloadable app would be a web page with a button saying “Download and install ThisApp” which–when clicked–would handle the entire download and install process.
This process does exist. It’s called ClickOnce. Not only is the install process literally just one click, the update process can be zero-click if you set it up that way.
Admittedly, this isn’t as effective if you’re not working in a controlled environment like an office. There are more clicks trying to do this from a remote, untrusted site. But it really is an immense improvement on setup.exe, and further blurs the line between one-click desktop installs and no-click web installs.