Argh, Tim Anderson tricked me into reading a post on daringfireball... As expected, what I saw wound me up. In the post John Gruber has some 'questions', and since I highly doubt that Google feels that they owe him a personal explanation I'll take a stab at the answers here (Gruber's blog does not allow comments).

Q 1. In addition to supporting H.264, Chrome currently bundles an embedded version of Adobe's closed source and proprietary Flash Player plugin. If H.264 support is being removed to 'enable open innovation', will Flash Player support be dropped as well? If not, why?

A: No, it won't. Flash does not hinder open innovation, quite the opposite. H.264 on the other hand does, and someone, somewhere has to pay if you and me want to consume H.264 content. In the case of Flash, Adobe pays some of the fees for us, but the future licensing terms are quite uncertain
The Flash community is one of the most highly creative collection of people I have ever had the joy of being a part of. I could go on and list 100 examples here, but just take a look at the most recent thing that comes to mind:
Use Kinect to Control Adobe Flash Using Node.js

That's open innovation in my book. Blitz didn't have to ask anyone for permission to build this application - compare that to iOS. They did not have to pay Adobe to either author or play Flash content - compare that to Apple's developer program. Large parts of Adobe's Flash Platform are open source, but the Player is closed - and rightly so in my opinion. Flash does not hinder innovation, it encourages it. Can the same be said for H.264?

Q 2.Android currently supports H.264. Will this support be removed from Android? If not, why not?

A: Who cares really? Are you calling Google a hypocrite if they don't? If so, where is your criticism of Apple for championing closed source codecs such as H.264 and calling their platform open? Maybe Google is hiding behind 'open' too?
And since the fallback technology for video playback in the browser is Flash anyway you can simply use that - Android has great support for Flash.

Q 3. YouTube uses H.264 to encode video. Presumably, YouTube will be re-encoding its entire library using WebM. When this happens, will YouTube's support for H.264 be dropped, to 'enable open innovation'? If not, why not?

A. It won't matter either way. I have a feeling that YouTube will ensure that their videos can be played back. Did things break when YouTube transitioned to H.264? Actually, transitioning is the wrong term here. Contrary to popular belief there was never such a thing as a 'Flash video codec'. Flash has supported H.264 for years, alongside other codecs. Adding WebM to the mix is a formality now.

4.Do you expect companies like Netflix, Amazon, Vimeo, Major League Baseball, and anyone else who currently streams H.264 to dual-encode all of their video using WebM? If not, how will Chrome users watch this content other than by resorting to Flash Player's support for H.264 playback?

A: Maybe like so: Chrome user navigates to video page. Site detects Chrome. Chrome plays video using Flash which is bundled into Chrome, using an H.264 or WebM version of the content, whichever is available. User is happy.
What am I missing here? Is there something inherently wrong with playing a video in Flash?

Q 5. Who is happy about this?

Google I guess for taking a swipe at Apple. And I know who isn't happy: you aren't, quite clearly. One's own medicine can taste bitter.