I'm not an expert, but I've been doing a little research on audio file compression to cut down on Amazon S3 charges for a personal site I have up that suddenly got a fair amount of traffic. The way I understand it, ogg vorbis files actually compress better than mp3s, so they're better on a quality/size ratio. A 3MB ogg file will generally sound better than a 3MB mp3 file.

I think the reason Amazon might not be supporting them is that not all browsers can play them natively — specifically, Safari needs a plug-in to play them. So, for my site, which is using jPlayer, I have to compress all the files as .oga and .mp3, then set up the mp3s as a fallback so Safari will stream them.

Almost no one uses Ogg, not a very glaring omission in my opinion. Amazon sells MP3s. Apple sells AACs. No one with any market share sells Ogg files.

My assumption is that this is a strategic move against Apple and ipod/iphone doesn't support ogg, so it doesn't come into play. Just a guess.