I haven't used Google Reader on an iPad/iPhone but I think it's unlikely YouTube is using HTML5 there. Mobile Safari actually has a built in parser for YouTube embed code, so nearly any YT embed will work even thought it's clearly an <embed> tag right to a SWF. Normally Mobile Safari will completely ignore *.swf URLs.
So in some sense we're just now getting feature parity, in another we're ahead.
I believe that just says they are letting video and audio tags through. When those are in the feed the ipad can play the video inline in reader. A little testing seems to show that they are also letting their iframe embed through as well and when you use that you do get the html5 version of the player on the ipad and iphone. It looks like the Vimeo iframe embed isn't allowed to pass though but hopefully they will allow it. I put together a demo feed that shows the difference if anyone is interested:
http://serveany.s3.amazonaws.com/soclose.atom
So in some sense we're just now getting feature parity, in another we're ahead.
Disclosure: I work for Vimeo.