What's the use of free open source codecs?

Just a subject I would like to get some feedback on. Looking at the wikipedia page of open source codecs there are some familiar names like Theora and XVID... but wait also LAME. An MP3 decoder, isn't that a proprietary format?

Ah I see, it's also mentioned

Note that codec is software, not a format — for example, video produced with the Xvid and FFmpeg MPEG-4 codecs is MPEG-4 ASP video.

So let's look at the wikipedia page for free formats... where the list is less familiar and we are basically left with Matroska, Ogg and FLAC. Return to question; What IS the use of free, open source codecs? I have good results with uploading high quality XviD/Vorbis ogm files to Vimeo but that's about it. Theora codec has reached 1.0 status recently but will this have any impact on society as we know? Is it even worth bothering with such a small user base for truely free formats? Do you have any future predictions for this subject?

edit: This question I asked before anything related to html5 video tag was known to me. Let's hope Theora/open video codecs will find the mass public that way!