So on one hand W3C can ignore the user's need of wanting to watch movies, by not supporting DRM. Users would then continue downloading plugins. And developers would have no way of interoperating with these black boxes.
On the other hand W3C could do something about it. Users would then have no need to download plugins. And developers would have a much more interoperable system.
Sure we all agree that video should be like HTML, where you can view its source and copy it around and play around with it. But the reality is that movies are exponentially more valuable in today's market than any other digital medium, so it's obvious that their creators are less willing to give them out without any protection.
Yes you might be willing to open-source your jQuery plugin that you've built for your e-commerce startup. But are you willing to open-source your entire project?