What most people don't realize is that diminishing returns would be inevitable even if there wasn't a theoretical limit to compression. While it's true that computers are getting more powerful all the time, we're also getting more bandwidth and storage space all the time too. Even if it were possible to achieve results on a visual par with x264 in half the encoding size, the computational complexity would be so overwhelmingly high that it's not hard to see why in most cases you'd want to stick with the faster codec simply because of encoding time and power use on consumer devices.

It really wouldn't be that surprising if we're still using video encoders with efficiencies somewhere in the h264-AOM range 1000 years from now. Cases where the tradeoffs make higher efficiency worthwhile are hard to come by.