When VXLAN came out a year ago, a lot of us looked at the packet format and wondered why Cisco and VMware decided to use UDP instead of more commonly used GRE. One explanation was evident: UDP port numbers give you more entropy that you can use in 5-tuple-based load balancing. The other explanation looked even more promising: VXLAN and OTV use very similar packet format, so the hardware already doing OTV encapsulation (Nexus 7000) could be used to do VXLAN termination. Boy have we been suckered.
Update 2015-07-12: NX-OS 7.2.0 supports OTV encapsulation with VXLAN-like headers on F3 linecards. See OTV UDP Encapsulation for more details (HT: Nik Geyer).
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