Among other reasons, x264 is GPL-encumbered, which would make it impossible to bundle with the sorts of projects that openh264 is going to be bundled with.
It's actually dual-licenced GPL and an alternative where you don't get the so-called "viral" properties of the GPL, but changes to the code still get returned to the project, kind-of LGPL-ish.
That seems to suit what Cisco are doing here, but a Cisco representative claimed that when they suggested just using x264 that it was shot down by Mozilla (possibly because Mozilla shared the common misconception than x264 is GPL-only?)
