Usability and security have been long been at odds with each other in software design. The web browser is no exception to that rule. When browsing the Web or downloading files the user constantly needs to make choices about whether to trust a site or the content accessed from that site. Browser approaches to this have evolved over time - for example, browsers used to give a slight warnings if you accessed a site with an invalid HTTPS certificate; now most browsers block sites with invalid certificates and make the user figure out how to unblock them.
Similar approaches are taken with file downloads. Internet Explorer tends to ask the user several times before opening a downloaded file, especially if the file is not signed. Prompting the user for actions that are legitimate most of the time often creates user fatigue, which makes the user careless in walking the tightrope between software with a "reasonable but not excessive" security posture and a package that is either too open for safety or too closed to be useful. Most browsers today have evolved from the "make the user make the choice" model to the "block and require explicit override action" model.
In some cases the security of the browser has had a major impact on Web site design and usability. Browsers present a clear target for identity theft malware, since a lot of personal information flows through the browser at one time or another. This type of malware uses various techniques to steal users' credentials. One of these techniques is form grabbing - basically hooking the browser's internal code for sending form data to capture login information before it is encrypted by the SSL layer.
Another technique is to log keyboard strokes to steal credentials when the user is typing information into a browser. These techniques have spawned various attempts by Web site designers to provide more advanced authentication with a hardware token and use of various click-based keyboards to avoid key loggers.
Another usability feature of the Web browser that has been attacked by malware is the auto-complete functionality. Auto-complete saves the form information in a safe location and presents the user with options for what he typed before into a similar form. Several families of malware,such as the Goldun/Trojan Hearse, used this technique very effectively. The malware cracked the encrypted auto complete data from the browser and send it back to the central server location without even having to wait for the user to log in to the site.
Giving all the vulnerabilities out there and the willingness of attackers to exploit them, you might think that users would be clamoring for more security from their browsers. And some of them do as long as it doesn't prevent any of their desired features from working.
"Attack and defense strategies are evolving, as the use and threat models. As always, anybody can break into anything if they have sufficient skills, motivation and opportunity. The job of browser developers, network administrators, and browser users is to modulate those three quantities to minimize the number of successful attacks."