I think this is super cool. I've been looking for an editor that lets you do everything you need to in the browser.
Ideally this would let you write code and switch quickly between your site and the editor, like an IDE's run button, but all within the same browser tab - I did a quick (and very crude) jsfiddle to show this: http://jsfiddle.net/RyT3w/1/.
Like you say there are security issues but that isn't a big deal with local web dev or within a company that has firewalls to the outside world.
I just open the live website in a different tab (browser tab, not editor tab) and use keyboard shortcuts to switch between browser tabs. It's the only way that is guaranteed to work. I could try loading the live website in an iframe inside the editor, but it will break if the live website uses X-Frame-Options: SAMEORIGIN and the editor is located on a different hostname (which it really should be for security's sake).
Cool, didn't know about X-Frame-Options. Either way, it'd be cool if there was a good option for when you don't have access to ssh or aren't comfortable with it, which it seems like this could fill.
Ideally this would let you write code and switch quickly between your site and the editor, like an IDE's run button, but all within the same browser tab - I did a quick (and very crude) jsfiddle to show this: http://jsfiddle.net/RyT3w/1/.
Like you say there are security issues but that isn't a big deal with local web dev or within a company that has firewalls to the outside world.