That is not nearly as backwards compatible because you are adding markup. Will the picture element inherit it's style from the inner img element? I don't think so. Now you have to go mess around with the CSS and have two different pathways for the style to be applied based on the browser.

Also, <video> fallback doesn't really work. If you have an h264 video, there is no good way to make it play in all browsers with markup alone (Firefox won't fallback to flash).