At no point did I benchmark playback of H.264 in Flash being anywhere near native speed - huge deal on battery powered devices, or simply playing >15fps without dropping frames. WebM's software playback was roughly as slow but nobody used it and Google did optimize it over time, which is the kind of maintenance which Adobe was uninterested.

Similarly, the fact that Flash was competitive with IE5 is the problem: browser vendors invested heavily in making that platform faster and richer. Adobe executives thought they had a monopoly and did not.