AFAIK a lot of "hardware" codecs are DSPs with some extra instructions that are good for video (like sum of absolute differences). In theory maybe they could support new algorithms with a firmware update. In reality, such firmware may simply not be developed or the DSP may not be fast enough to run a new codec.
Most DSPs I've worked with have an assortment of really specific extra instructions added for the particular application. I suspect these DSPs are similar - adding a new codec probably means adding a few more instructions, or even the odd hardware block dangling off the side.
Do you think the Mill family of processors could find a niche here? (if it ever sees the light of day, and I hope so because the technical videos are super-interesting (and educational))