I wish .mkv never even appeared of course as I don't give a damn really if a container is "better", and even less about it being open source. .mkv didn't improve my (or anyone else's) life for an iota, yet created problems with incompatibilities, forcing me to buy new costly equipment.
As regards re-encoding, bemymonkey put it right - it's a lengthy process, a major hassle, makes watching video on my phone pretty much unrealistic - I don't have time for this when going for a trip. I also don't download videos to watch them on the phone - I use other equipment for that purpose, and .mp4 isn't even supported there, I think. Having multiple copies of everything would just be insane.