It's only useful with nvidia hardware, because only they have a full implementation. VDPAU itself is fully open, there's a state tracker using it, for example. Though for now it only decodes mpeg2. But it's there.
Intel could provide hardware decoding via VDPAU, there's nothing technical preventing them from doing it, it's just that they're already using VAAPI.
Saying VDPAU is not open, just because one implementation is closed, is silly. That would mean xvmc is not open either, seeing as how nvidia has a closed implementation in their driver. Which is, of course, equally silly.
There were fully open options before nvidia threw in their nonsense. Their objective is to splinter development and push their proprietary solutions. That is all.