I don't think you go in the right direction Ash :
Your team have not finish C1. But it is your time and your work, and C1 was free... so, you make what you want. But you loose some "serious image".
Now for C2, Html5 is great, but how many browser use it ? what about the difference the different browser with the html5 ? What about security with a local access of data user ?
Html5 must be an option. and just an option. Compiled game is the best way.
If you want more revenue, why don't make before a stable 1.0 ? Just a 1.0. Not a 0.9962 and say after "Hey guy !!!! i come with C3 !!! more features more...".
I understand your problem of student. I understand that html5 i a great idea and i see so good engine in html5 like Mr Doob Harmony that i think your right about this. But this is a wrong way too stop C1, a wrong way to just put a html5 export.
To interest developper, it would be nice to have a croos-platforme like Shiva or have many exporter. But having many exporter is a hell to support...
I think C1 or C2 must be commercial. Like Ct or Shiva, choose a good price, put a commercial guy in your team !
But like i said : this is your time, your work, and all of this is free in this moment. So you make what u want !
EDIT : there is the link about security problem with local data in html5.
http://www.nczonline.net/blog/securestore-proposal/
Dude, Construct 1 is bult on a shaky foundation. As the Devs have said in the past, it would be easier to start from scratch then continue working with bad code.
I don't think they have lost any "image" in this move.