The problem is multi-faceted.

Firstly, Google would not spend $120M on On2 and open source the VP8 codec unless it had intentions to fully use it. HTML5 video doesn't yet provide the full range of features that Flash offers for streaming video (like automatic rate control and DRM). Google will probably address those limitations over time via instant updates to Google Chrome.

Advertising using HTML5 would require a large amount of retooling, which is why I don't think we've seen anything on this front yet. They will likely push out something once it's fully complete since it's for advertising partners, rather than consumers.

Inserting video ads would be quite easy, they could modify their server stream processor to simply inject an advert into the WebM stream; therefore the advert would play as if it were part of the original video. This couldn't be blocked at all then, because there would be no client side file switch. If they just switched the video file about using JavaScript on the client, then advert blocker would just neuter the ad script (as they already do), so doing ads serverside is the best option.

Time, it just needs time. Google have a long plan with WebM and all the parts are not yet in place to switch wholesale.