To be fair: they don't want short, small videos any more than they specifically wanted gifs.

They want moving images that load quickly. Which has meant short/small/gifs, because most US bandwidth still sucks. And thanks to the mobile explosion it now means short/small/h264.

But I bet that as people become used to 5-10x space savings from h264, they'll quickly respond with videos having 5-10x more data. (larger/longer/higher-res clips)