You're right that they need Flash fallback anyway for <IE9, <Safari4, and <Chrome3 — but you're ignoring that it's not a big deal to just do it for Firefox and

You're right that they need Flash fallback anyway for <IE9, <Safari4, and <Chrome3 — but you're ignoring that it's not a big deal to just do it for Firefox and Opera too. They already have "Works better in Chrome" banners on Youtube for windows users. Nobody is going to lossily transcode to Theora — they'll just use Flash like they have to already.