Microsoft's slowness to adopt emerging standards is probably the biggest hurdle
that is impeding adoption of the HTML 5 video element. Microsoft is still struggling to implement long-standing Web standards, so it seems unlikely that the software giant will jump on board with a highly complex emerging standard
that is still in the draft stage. Microsoft also has some competitive interests on the table that conflict with standards-based video efforts. Specifically, Microsoft is pushing its own Sliverlight browser plugin as an alternative.
Aside from Microsoft, virtually every other browser vendor already has an HTML 5 video implementation
or has publicly announced plans to develop one. Microsoft's dominant marketshare, however, largely deflates the value of that widespread support in the broader browser ecosystem.
There are some factors that could potentially push Microsoft into action, but it's hard to imagine it happening any time in the immediate future.