WebM's encoders that are available are very slow, and not supported or has very flaky support of most apps people are using out there.
What's going to happen, is chrome users are going to be served H.264 in a flash wrapper.
This move is not going to help kill flash, it's going to help extend it's life. If you think about it, it is not in googles best interest as an advertising company to kill flash. They'll have more trouble with content protection and are unable to overlay ads in fullscreen mode.
Flash adopted H.264 later.
Could you elaborate on this or provide a citation? I thought Flash video was almost exclusively a proprietary variant of the H.263 (yes, that's not a typo) standard until the most recent release of Flash.
I would imagine that today all but legacy content served via Flash on the web is a standard H.264 file that can be easily repurposed for serving via HTML5 to Safari and newer iDevices (older ones only supported the lower profiles).
See this: http://www.adobe.com/products/player_census/flashplayer/vers...
My contention was that serving H.264 became feasible the day Flash started supporting it. The day before VP6 was a better choice because everyone had it installed and could therefore actually watch your video. The same is true now of H.264, it may be a wonderful codec and used in Blu-Ray and blah, blah, blah but the reason you can put it on a website and have 98% of people watch it is because it's supported by Flash. Sure Apple can force you to install Quicktime to watch their keynote, Microsoft can do the same with Silverlight, everyone else uses what's already out there on basically every machine, which is, and has been for a while, Flash.
So globally, in a couple of months when Google turns off H.264 in Chrome the HTML5 support for H.264 will stand at 5% (yes, that's not a typo) including all mobile browsing i.e. iOS which contributes less than a percent. Even in the US where Apple is strongest it only reaches 10%. Meanwhile in Europe WebM in HTML5 after Firefox 4 is released will be up at 60% (50% worldwide, 40% US).
So with numbers like 60% vs 5% why isn't WebM going to totally wipe the floor with H.264? How can people be complaining about Google ruining things and causing them so much extra work by taking away their 10% of the measly 15% share that H.264 has now? Short answer: Flash.
Flash currently delivers H.264 to 98% of the web. They've promised but not yet released VP8 support and can rapidly get it to a good 85% of the web within a year of release. What Google does with Chrome is really irrelevant in the face of that. It's more about sending a message. A message that roughly says "H.264 in HTML5 cannot work without Flash as a fallback or shiv, so a strategy to promote WebM via pushing people to Flash in the short-term is no less (or more) ridiculous". Apple's position is only tenable because of the actions of their two arch-frenemies: Adobe and, to a much lesser extent but growing as IE9 comes online, Microsoft and either or both may just see this as a chance to stick it to Apple and steal some glory for themselves.