What are you talking about? No one’s writing their paper in HTML.

The problem is having the submissions be in TeX and converting that to HTML, when the only output has been PDF for so long.

The problem isn’t converting HTML to PDF, it’s making available a giant portion of TeX/pdf only papers in HTML.

If you’re arguing that maybe TeX then shouldn’t be the source format for papers then I agree, but other than Typst (which also isn’t perfect about HTML output yet) there aren’t that many widely accepted/used authoring formats for physics/math papers, which is what ArXiV primarily hosts.