Even though there are better alternatives to MP3 from both a technical and legal perspective, and even though Apple has been pushing for AAC within iTunes, nothing is close to replacing MP3 as the defacto standard for distributing audio files.
There are multiple reasons for this, like the huge cost of re-encoding everything that was once encoded in MP3, the broad hardware and software support or the fact that MP3 is good enough for most purposes.
Broadband plays a role here as I'd bet that if it weren't so prevalent today, then people would actually want formats that sound better at lower bitrates. As it is, Amazon doesn't have a problem in selling songs encoded at 256 kbps, although you won't hear a difference when comparing that to an 128 kbps encoded AAC file from iTunes.
An upgrade scheme only works if files encoded with the newer codecs don't have a problem being played on older software/hardware, because here's the thing ... H.264 is already good enough as far as video codecs go, just as MP3. And this is doable, but the newer patents will most likely touch the encoders, not decoders and the newer patents themselves will get more fragile over time, as you can't really innovate on top of the same technique forever.
All in all I agree with the general sentiment ... proprietary platforms are more dangerous than patents and native apps are more dangerous to the future of the Internet than proprietary codecs.
