The difference is amazing, especially at high ISO.
What is the H.264 doing to the image to destroy the contrast and brilliance of the color?
It's not necessarily the compression. Most Canon DSLR sites recommend you turn the in-camera saturation, contrast, and sharpening down all or most of the way then add those grading steps later in your editor. This gives you the ability to tune it to the scene. When you import the DNG video frames using Adobe Camera RAW using the defaults, a contrast curve, and sharpening are applied. When I did the comparison of my fiance, I used something like -51 contrast, -20 saturation, and no sharpening in ACR to try to have a fair comparison.
I would suspect that what we are looking at here is just that...the H.264 was shot with in-camera processing turned down, but the ACR defaults.
I believe when the ML guys were posting their early success of getting RAW frames they mentioned that internally Canon is down-rezing the video to something like 720p before upscaling it to 1080p and converting to H.264. This would explain the lack of detail in Canon's H.264 output. They had to work around this to get real 1080p output. In other words, H.264 itself isn't the problem...the Vimeo video above is likely H.264 compressed. Also so are Bluray movies.