Lee-
WIKIPEDIA IS NOT HTML. Wikipedia is a collection of free encyclopedic content, currently being delivered to users by the technology available to us at the time, which happens to be HTML. Wikipedia's content should be described in unambiguous ways that preserve the content and structure of documents, and that can be rendered readably and edited easily. HTML fails to meet at least some of those criteria (notably ease of editing).
True. But I agree with Uli that the flexibility of HTML tables is important. I also do not think the proposed {{style}} syntax really makes things easier. Case in point: I did not really understand it before reading it a second time. I think the idea of weak attachments, e.g. {{red}}foo, is a counter-intuitive one. On the other hand, the HTML-style <math> tag is in wide use on Wikipedia -- people seem to grasp it easily.
I think having styles usable with a <foo></foo> syntax is perfectly acceptable. Those who do know HTML will find it immediately easy to use, and those who do not know only have to learn one thing: <xy> starts something, </xy> ends something. I think that's more than simple enough, whereas the "What does {{xy}} refer to" question raised by your syntax is more complex. And it has the additional disadvantage that those who do not know HTML have to learn an entirely new syntax. Also, {{}} looks ugly, code-ish.
I think retaining HTML tables within their namespace, while ignoring all HTML outside of it would be the best solution. I know what you think: It would be cleanest to get rid of all HTML. But consider this case more like having TeX or SVG support. We want to support existing markup languages where they provide us with better results than hacking our own. We can view HTML-tables as one such markup language, even if they are only a subset of one.
The table namespace does not necessarily have to be a real namespace whose contents would be transcluded (eat your heart out, Ted Nelson), it would also be possible to use a syntax like
[[Table:Periodic table]] <table>... </table>
Where the table is hidden in the editable wikitext (user option), and a small "edit" link is added at the bottom of the table in the rendered HTML. No impact on server performance, no silly "Table talk" namespace, but the same effect. Existing tables could be converted easily simply by adding a [[table:name]] link at the top.
Regards,
Erik