There's been a lot of talk about merging chat and game. The way I see it there are two major obstacles with this.
1. No room in screen layout
Elements uses a lot of screen space. I personally prefer to see the client as big as possible, which is why I stopped playing in Kongrate as soon as I found the main game site.
Having chat in the same window would guarantee that the actual game would be smaller (like on Kongragate). Of course if it were optional, that would remove this problem altogether.
1. Chat uses ridiculous amounts of server CPU
This is something most people don't know. Even though chat looks simple and innocent, it uses TONS of server resources. Elements, with thousands of simultaneous players, all connected to chat, would probably mean Zanz had to buy a dedicated server just to run chat.
There might be some way of fixing this problem, like making the chat update only every 10 seconds or something, but I doubt there will be any solutions without a downside.
I agree that our current chat kind of sucks because you cannot scroll up. There is the "history" button but it's a bit inconvenient. I'll try to fix it at some point.
There are many other problems with the current chat too. I ask everyone to be patient. Everything will be fixed in time.