When reading the feature my thought was that it would be a floating window _within_ the browser window - which I think I would have preferred.
So popping out a new firefox window that operates like a normal window would be great, but the current solution seems like the worst of both worlds.
Also on an unrelated note, seeing your username we used to work together - hope all is going well :)
I'm using a tiled window manager on X and was rather confused by other comments here, before realizing my window manager must be giving me unintended control over the video popup. I just get a floating window that's fully draggable and resizable identically to other windows.