That's a bogus argument and misses the point completely.
That you have closed source systems deployed on the open web is completely OK. That you have closed sourced browsers interpeting markeup is also completely OK. As long as the markup and code produced and published is compliant to the open standards we have all agreed upon.
Because then anyone with the specification can interact with that content. That means that anyone, of any size, can sit down and implement a fully valid and compliant web-browser.
This latest proposal from W3C means an end to that. Having the HTML specification will not be enough to create software able to render all the content on the web. Your browser will need to be "sanctioned" and "supported" by the DRM-vendors in order to work on the web.
New platforms (FirefoxOS, Tizen, etc), new browsers, any new players at all and all open source endeavours are effectively shut out from this new web the W3C is drafting. That is unacceptable.
This is a disastrous departure from any former W3C specification and directly in opposition to the W3C's own mission statement.
We are only left to guess what sort of corruption has lead to W3C sinking this low. Whatever happened to allow this rot, a new consortium seems like a good way to solve it.