I chose tabs to start because (1) it's easier to implement than standard notation, (2) most guitarists use tab instead of notation, and (3) classic tab really needs to be brought into the 21st century.
With that said, I'm working on a standard notation version now, and it's going to be amazing. It's a surprisingly tricky technical challenge to render sheet music in the browser -- there are centuries' worth of special cases!
Yes, definitely looked into Lilypond. It produces beautiful sheet music, but I can't use it because (1) it's GPL and I intend to license the technology, (2) I'm generating the notation client-side (for responsive design) and (3) I need the ability to highlight certain notes in real time to show the user which notes are being played.
Why did you choose tabs which is rather weak (correct me if I'm wrong) notation?