I think what they're suggesting is that yes, Google spent some SWE hours to implement it, but they have (or will, over time) saved more than that in equivalent compute (by pushing it onto users). So, from Google's point of view, they saved SWE hours on the company balance sheet, so it's a win.

But from the larger point of view of "everyone," this actually made the total cost worse. The cost/benefit analysis from Google's point-of-view was worth it, even though it made things overall worse in the larger perspective. Hence "tragedy of the commons," where the short-sighted behavior of some actors makes things worse overall.

They still have to pay for H.264 and the cost of it are peanuts.

They did this during the period where Chrome was eating into Firefox usage, after telling Mozilla that they would drop H.264 in favor of open codecs but never keeping that promise. Here’s some period discussion:

https://www.osnews.com/story/24263/google-h264-stifles-innov...

What this meant in practice was that Firefox would play YouTube videos at close to 100% CPU and Chrome would use H.264 and play at like 5% CPU, and since it was VP8 the quality was noticeably worse than H.264 as well. Regular people talked about that a lot, and it helped establish Chrome’s reputation for being faster.

Pretty much every device these days decodes VP9 in hardware.

It's been a long time since I've seen a VP8 video on YT, so I'd assume it's not even used anymore due to worse compression.