No, it's not. OK, the current, wrong, implementations do limit it to 256 colors, but that's not a limitation of gif. Mulitple frames without a delay allow multiple pallets and multiple times 265 colors.
But this limitation is just another reason not to use it.
Can I use Webm?
Yes, you can, and you should. Or h.264:
As you said, the hack to get more than 256 colors is to redefine a sub rectangle with a new palette. But that's also the mechanism used to make animations. Are you able to get fluid playback with that?
Note: I'm not talking about new frame being just a new sub rectangle, more about N sub rectangles for the same frame, then a delay event, then M sub rectangles for the new frame, etc
"vii) Delay Time - If not 0, this field specifies the number of hundredths (1/100) of a second to wait before continuing with the processing of the Data Stream. "
See the last instance of the phrase "graphic control" in the document to see that multiple images can come with no intervening GCE blocks and see the paragraph containing the 5th instance of that phrase to observe that a GCE block only affects the first image following the GCE.
A better hack (but it's still a hack) might be to wait one frame (or longer) before returning to the beginning of a looping gif. Given that this would be significantly harder than the current approach (which is apparently either delay = max(delay, 16ms) or if(delay < 16) delay = 100) and the only reason for it would be to support this pretty-niche multi-palette composited-frame thing, it seems like it would be hard to argue for.
However, that's unlikely to be necessary because if you are just doing a high-color image with no animation, you may as well use JPEG or PNG.
In a world where Internet Explorer is not a major browser.
http://caniuse.com/#feat=webm http://caniuse.com/#feat=mpeg4
That's even more compelling when you remember that the only browser which had releases with support for WebM but not H.264 is Firefox and that's been phasing out for awhile: support for H.264 shipped in FF21 on Windows, FF26 on Linux and FF35 on OS X.
Unless you have a lot of Mac users who don't upgrade, it's probably not worth the hassle particularly since WebM doesn't compress as well as H.264. If VP9 ships that story could change if it delivers an advantage over H.265 compelling enough to get Microsoft or Apple to integrate it or the larger video sides to add it to their toolchain. For most places it'd have to be really compelling to be worth nearly doubling their storage costs.
I can probably find some links later. As I see no option to upload video directly I'm wondering if it requires an account, or whether it was their new(ish) GIF conversion process (IIRC some look like original videos though).
I'm inclined to say that the enormous compression wins are worth getting the remaining stragglers to upgrade (both of the sites you mentioned already do this, for example, as do other common targets like Twitter, Facebook, etc.).
Makes it completely unsuitable for many uses of GIF.
Would love to be wrong or out of date on this, so feel free to let me know if I am ;)
I find it makes reading the web a much more pleasant experience.
Also, I'd bet that video tags eat memory. A web page with ten animated GIFs might make the user puke, but a web page with ten auto-play videos will likely make the web browser puke :)
No, you're wrong. You have this preconception that videos are obligatorily 300 megabytes or something.
There's virtually no reason for in-hardware decoding of a smaller file to make the browser struggle more than with gifs, which are much less optimized and never in-hardware.