The main x264 (H.264 encoder) developer, Jason Garrett-Glaser, has written up an interesting analysis of WebM/VP8. This analysis has gotten quite a bit of attention online, and a lot of people seem to take it as the final word on the matter.
However, as with most things, there is more than one side to this story. …
Gregory Maxwell wrote a mail to the Wikimedia developer list responding to some of the criticism.
Jason's analysis shows that WebM actually compares favorably to the H.264 baseline profile. Since one of the main criticisms of Theora was the lack of hardware support, it is interesting to note that the H.264 baseline profile is what you need to use if you want to reach all those platforms and devices out there, including the iPhone! This means that the comparisons beyond the H.264 baseline format are not that relevant to HTML5 video.
Another problem with Jason's analysis is that he is comparing a new and "raw" video format to an established and mature encoder like x264. Despite claims to the contrary, The WebM format is not set in stone. The WebM FAQ points out that there is a separate development branch for possible future improvements.
The x264 developer's analysis is certainly interesting, but I don't think it is the final word on "WebM vs. H.264". Not only is WebM doing well compared to the H.264 baseline profile, which is what's relevant to HTML5 video, but I think WebM will continue to improve both quality-wise and performance-wise.
There's no reason why it shouldn't.