Earlier quoted context omitted.
There is a strategy in the middle however for google/youtube to make people want to migrate to browsers and devices that supports webm/vp8: all they have to do is to continue serving both webm and h264 versions, but make the h264 version a worst experience. For example: make all h264 encoded clips on youtube become grayscale while mantainig the vp8 ones high quality and in color. People would not be prevented from wa…
Don't forget that more and more video content will be available on iPad from ITMS. And I assure you, it won't be grayscale, and it won't eat as much battery as WebM without hardware support.
Apple supporting both vp8 and h264 would continue to be the company with the best mobile devices, but if they don't embrace the open unemcumbered format that firefox, opera, chrome and youtube uses they will be giving an either/or kind of choice for mobile consumers, they would be making them choose between hollywood and youtube, stating that their costumers cant have both.