On one side, I can certainly understand why Apple went with this, even if it drives me nuts that Safari@iOS can't do inline play at all (because it prevents nice artistic stuff using a canvas overlaid over a video element, for example), even if the play action is user-initiated.
On the other hand it takes away a LOT of flexibility - seriously, I don't want to do 50MB GIFs for animated background or weird JS trickery when I can use a 2MB video for the same effect.
The default is to still auto-play silent movies (movies with no audio track or with the muted flag). If you're just using this for a background effect, the best solution is to just get used to the fact that for a minority of users, the video won't work and you'll have to fill in something else (don't use a 50MB GIF, just go with something non-animated!), but a majority of users will still get the silent video.
Correct. A static image might be a good fallback for users who completely turn off all forms of auto-play. It's easy to detect auto-play is off and provide a graceful fallback.
When I am on my phone, having a monthly download limit of 2,5 GB after which my internet is cut off, I don't really want do download a 2 MB video at all.
I was not aware that "artistic" is now a synonym for "user-hostile". I promise you nobody wants to spend 2%-3% of their monthly AT&T data allotment on your partially obscured background video.
On the other hand it takes away a LOT of flexibility - seriously, I don't want to do 50MB GIFs for animated background or weird JS trickery when I can use a 2MB video for the same effect.