Well, there's a difference between wavetable synthesis and sequenced sample playback (despite the fact that the latter is often referred to as the former), which is more along the lines of what I'm suggesting. There might be a sort of meeting point of MIDI and MOD where the player reads a MIDI file, but uses modulated sample playback like you find in MOD trackers instead of synthesis. Even better, it might have separate samples for different note ranges.

Still, you're right in that FM synthesis was the standard back then, and either method above is likely to be a lot better. That said, whenever I encounter one of those web sites where they think it'd be really cool to embed a MIDI file, I still hear FM synthesis.