I was under the impression that competition was generally considered a good thing, especially when the products involved in this case are similar enough that it'd be easy to automate interoperation between them.
IMHO, the 2 products are too similar for the competition to be very advantageous.
The past has shown that all real future innovation in version control will come from new products, not established products... Five more years of Git vs. Hg is probably not going to help innovate version control systems.
I see git vs. hg as a KDE vs. GNOME type thing -- similar products, yes, but with different underlying philosophies and presenting the same ideas in usefully different ways.
