Well, the reticle being bound to mouse XY is going to keep it locked there; trying to make it move with the player would basically mean trying to move the mouse cursor with the player, which I don't think is possible with a browser-based game system.
One simple way of pulling it off would be to keep the character centered at all times (scroll to) and make sure that the layout itself is always allowed to scroll (basically, you need to prevent the player from reaching the edge of the layout).
You end up with this: http://superstickman.com/movingreticle/