Any IT enterprise, whether a part of a larger entity or itself the entity, must strike a balance between what its clients demand and what it must do. Mozilla feels that it needs to push Ogg Vorbis and Theora into the mainstream, despite the fact that its clients could not give a rat's ass about that. They failed to write it directly into the standard so now they are using their market position for the questionable tactic. However, what they are doing is still better than what Microsoft had done when they were in Mozilla's position.

Also, isn't FF3.5 faster now than it ever was, even as Firebird or Phoenix?

As far as forking FF: good luck. The code is a bit of a mess and there's a huge amount of it. What organization will want to take this on? I think you would have better chances at cloning WebKit+V8.