This is very worrying.
Apart from abandoning the principle of open standards (a disaster in itself), consider who and why.
Google pushed for this. This is almost certainly because they want to add DRM to YouTube. Given Youtube's popularity this is likely to mean a Google DRM plugin will be come the standard for web video - i.e. Google will do to online video what Amazon is doing to ebooks and gain a near monopoly on distribution. The launch of a Youtube subscription service confirms this.