The aim of this DRM implementation for HTML5 is that it can be optionally used by HTML5-based media players for content protection. There's not going to be an Internet without DRM, so while the Free Software Foundation and others may be against EME, it's at least a standardization on HTML5 rather than all the different DRM protection schemes in Flash, Silverlight, browser plug-ins, etc.
The Encrypted Media Extensions concept is backed by Google, Netflix, Microsoft, and other firms. EME doesn't mandate an encryption algorithm as part of the draft but they are provided separately through Content Decryption Modules (CDMs) that are part (or plug-ins) to the web-browser.
Google is already going ahead with EME in Chrome and Chroms OS. More details on this new HTML5 work can be found at W3.org and this week's announcement.