They decided to use the silicon space for other things. The Pi5 CPU is powerful enough to decode most h264 streams in software. The Pi5 has an h265 hardware decoder.
Not true actually. If by offloading you mean to a device that uses a really small model with 8-bit quantized weights you are not actually solving anything.
And maybe the pi5 has enough cpu to do the decoding. But how much would be left over for more interesting AI tasks ?