H.264 is a far superior codec to Theora. For a large site, distributing video in Theora would significantly increase bandwidth costs, and would hurt user experience. I've seen the articles that claim that the two are basically the same, but it just isn't true - you can cherry-pick cases that look close, but those cases are a minority.

That said, the world needs an open-source video codec, and I'm glad that Mozilla is taking a stand here. MPEG-LA is much more likely to offer favorable licensing terms if it doesn't have a monopoly on web video.