But it wasn't created for this purpose. It was originally created by On2 to be sold commercially, but nobody bought it because it sucked. They dumped it as royalty-free abandonware, and some free-software partisans picked it up, changed some strings, and released it as Theora.

Nobody wanted it then, nobody wants it now. The dumping could even be seen as a brilliant strategic move to troll the hell out of the market for codecs by building a community of earnest activists yelling at everyone.