Flip reversing it
Flash supports H.264. Some, but no means all, browsers support H.264. As a content provider, you can (in theory) therefore keep a single encoded video and serve it in either a Flash container or an MP4 container as the browser will accept. Per the current version of Flash, you definitely need that H.264 video in order to reach the majority of end users. So whatever licensing issues may apply to Flash, you're already having to navigate them. From that point of view, H.264 as a supported <video> tag codec is a big technical win.
Of course, I take Google's point that integrating something that is patent encumbered into the core stuff of the web — whether by specification or by common practice — could stifle innovation and raise costs in the future. See also: the GIF debacle. WebM hasn't been litigated yet, which is a worry, but the simple act of muddying the water is likely to be beneficial while the standard is still up in the air. I'm willing to take Google at face value when they say that they expect WebM to be litigation proof; their very selective stands against proprietary technology may be self serving but in this instance Google's best interest aligns with the web's best interest.
What I don't put any stock in is ad hominem attacks on anyone that calls Google hypocritical. Even supposing that all those calling Google's stance hypocritical are doing so through a vested interest in the Apple ecosystem and that Apple themselves take hypocritical positions, how does that exonerate Google?
For my money, the people Google are being hypocrites and we're all benefitting as a result.