One could argue video players in general just lose relevance in an age of streaming ... And everything has definitely not crystallized around h.264. plenty of sources will give you widely different things, for instance digital cameras, webcam, even screen recorders. Basically most of the input is in completely different formats. If you were thinking about pirated movies then it is of course more the case, but I wouldn't think it is the biggest use case of VLC. I for one appreciate being able to read both Mac screen recordings and clips from my DSLR with the same software without installing a bunch of weird stuff.