Google product manager Mike Jazayeri attempted to explain to everyone Google's reasoning for dropping H.264 support in Chrome's video tag.
"We believe there is great promise in the tag and want to see it succeed. As it stands, the organizations involved in defining the HTML video standard are at an impasse," Jazayeri said. "There is no agreement on which video codec should be the baseline standard. Firefox and Opera support the open WebM and Ogg Theora codecs and will not support H.264 due to its licensing requirements; Safari and IE9 support H.264. With this status quo, all publishers and developers using the tag will be forced to support multiple formats."
Basically there are two camps. Microsoft and Apple are in one camp, and they want to push H.264 and force publishers to pay royalties for every video that gets played on IE or Safari. In the other camp is Firefox and Opera who will never support H.264 because it requires publishers and users to pay royalties for publishing and viewing videos. Apple and Microsoft users are paying for an H.264 license as well, but it's bundled with the software or hardware that they've purchased.
Unfortunately, many people don't seem to understand the issue at a basic level, or how important the battle over the video tag is.
One commenter to Jazayeri's post said, "The video tag is irrelevant anyway, especially with WebM."
Another said, "Google, don't do this. THIS IS EVIL!"
But for people who've been around awhile, Google's decision makes a lot of sense.
"This is the right time to push for open and unencumbered technology in HTML5," Joel Martin commented. "I remember the pain from the similar Unisys/GIF debacle which inhibited Web development for years."
"By rejecting that which closes the Web," Haavard said, "while at the same time promoting open technologies, Google is contributing to a more open Web."