The real problem is that it's compiled by the browser, and that means it works in a very different way depending on the client.
Not only is the actual DOM different depending on the browser, but there's a massive difference in performance and layout.
Edit following clarification in question
Suppose multiple interpreted languages were supported - you still have the same problems. The various browsers would still be buggy and have different DOMs.
You can't use compiled languages in the same way - then you're introducing an executable that can't easily be scrutinised for what it does. Lots of users would choose not to let it run.
OK, so what about some sort of sandbox for the compiled code? Sounds like Java Applets to me. Or ActionScript in Flash. Or C# in Silverlight.
What about some kind of IL standard? That has more potential. Develop in whatever language you want and then compile it to IL, which the browser then JITs.
Edit following further clarification in question
There are still some corporate internal applications out there that use VBScript (and some rely on those security holes), and they're still running IE7 (they only stopped IE6 because MS finally killed it off).
Adding an alternate language for interpreting in browsers faces two major problems: