Maybe because they decided that most connection speeds and display resolutions have improved enough that 480 isn't an unreasonable default?
EDIT: Oh, I see now that the link is for YouTube Live Streaming. I don't really see where it says the default has changed there. And it seems lower resolutions are still offered.
Another EDIT: I know that the size of my browser window will affect the default player size. For example, if I've recently downloaded something and the download bar is showing at the bottom of my browser, the YouTube player will be smaller. If I close it, it will resize to a larger area and set the quality of the video to 720p. So maybe you've just resized your browser window recently?