The ability to encapsulate markup, style, and behavior into a single unit with a clean API is an enormous improvement. Of all the new HTML5 features, I think Web Components have the highest potential to relieve a huge pain point for developers.
Image an online repository with all kinds of widgets -- range sliders, date-pickers, sortable lists, etc. But instead of a collections of inconsistent jQuery plugins with CSS dependencies, you get a single, self-contained module that can be interacted with as if it were a native DOM node.