I think it's obvious why thy did this. They don't want Google's open source WebM codec to become the norm so they're going to push even harder for h.264. The whole Internet is better off in the end if it's built only on open source and free stuff.
WebM is not that great technically ( http://x264dev.multimedia.cx/archives/377 ) and is unlikely to remain royalty-free if it ever takes off as there are many patents that could apply to it's code. H.264 will play in both flash and the browser. It's a standard codec that is used in most workflows already. On top of that, MPEG-LA has announced it will always be royalty free for video that is free to end users ( http:/…
There are other restrictions that I am surely missing, but the point is that MF licensing H.264 is not a feasible solution for such a shining example of free and open source software projects.