Whether any of that is AMD's fault, or even within AMD's power to correct, I don't know.
But whatever, good job nVidia for taking the initiative.
Now as far as HW video decode acceleration goes, it's great that nvidia has a working solution. I don't see too much of a problem around a vendor specific interface because if and when the "community" decides on a non-proprietary API, they'll probably just provide a wrapper around VDPAU.
But HW decode though has a drawback in general -- you can't do software driven post-decode processing, at least not yet on any platform AFAIK.