What real alternative did they have? Unlike RMS, Mozilla have always played with a more pragmatic strategy. If you want to win this war, you need to educate users. Being that only a handful of people out there actively care about privacy issues and platform openness, you need to produce a compelling product first and foremost, and then push your agenda on top of that. If Mozilla were to not implement EME, they'd cripple their own capacity to reach those users, and the war would be as good as lost.
Today, we just lost a battle. In it, the Google funded Mozilla mercenaries were slaughtered, their forces diminished. We could award them a medal for their valiant effort, but you know they are dead. The war in the future isn't won or lost on their actions.
Once Google+Microsoft or Google+Apple or god forbid Google+Microsoft+Apple have decided to do something, there is literally nothing Mozilla can do to stop it. It's too late. If Mozilla manages to slowly build up a larger market share, at that point they may have leverage in those situations. Right now they don't, and pretending to have leverage only further erodes their marketshare.
The only real contender is Netflix but only once the Silverlight plugins reaches EOL. At that point Netflix will have to choose if they want to risk loosing 16% (est.) of their Firefox customers. Of course if Mozilla decides to implement DRM right now it won't be an issue for them.
One thing you might not have thought about, is that at the moment, we have Flash, Java, Silverlight, etc which all periodically are found to have mahoosive security flaws - because they can do general purpose things. If Firefox moves to supporting a plugin which is used for exactly the same thing, but that can only do decryption, then suddenly the browser becomes much more secure. If anything, it's an advantage.
For DRM to work it needs to have direct access to the hardware. Otherwise it's too easy to run the plugin in isolation and capture the output. So while the API surface is smaller it's still problematic because DRM bypasses all the sandboxes. Issues like cross-platform support still aren't resolved because DRM providers don't typically provide linux runtimes. I really don't see where this is an advantage versus no DRM.
As I noted above, this decision doesn't make or break DRM. I think we should just take note that Mozilla would betray their principles for some .5% of market share.
They exercised a freedom of choice they had, and this is the decision they made. This is what we judge them on. No backsies, no "but I didn't want to", just pure "go fuck yourself Mozilla".