The DRM module itself would probably still be a closed-source, black-box piece of software, but the playing of the video would be handled by the browser natively w/o the need for plugins like Flash or Silverlight (since after decryption you end up with a standard H264/WebM stream in a <video> tag.) Now, sure, you can argue until you're blue in the face that DRM is bad, but the good thing is that you're separating the DRM from the presentation/rendering layer. This is, without a doubt, a step forward.
In theory this would make things even easier for pirates wanting to capture content since now there's a standardized way for the browser to interface with the DRM layer, decrypt the content, and play it.
The FSF's argument here is null and void because Netflix never was a free service to begin with. They never claimed to offer Linux/free software compatibility, and as a private company they have no obligation to.