"Further, H.264 was a complete non-starter for Mozilla, and Firefox holds nearly 20% of the market. Using H.264 for HTML5 <video> would have guaranteed market segmentation and hurt the chances of a truly open future"

Except Internet Explorer will continue to be the highest-marketshare browser for the foreseeable future, and IE9 won't ship with VP8 (though you can install a codec for it, I doubt regular people will). It does ship with H.264.

Maybe Microsoft can be convinced to ship VP8/WebM in IE.