The latter. Generating html reports creates another static view of the models (which is quickly out of date).
There's really two things here. Firstly a web client for viewing the repository, with a simplified version of the project browser or model views window.
Then, the ability to view any diagram via a unique URL, ie the diagram has a unique identifier which is included in the url.
Both of these views should not be pictures (like the html report) but contain objects which can be interacted with (to a limited extent obviously).
This would make it much easier to integrate with corporate intranets/wikis etc.