Well, if you look closely his lifegauge (the one playing Ken) is almost out and the one Playing Chun-Li has lots of power left. Just one hit is enough to finish Ken off. Usally you lose a little power when blocking too if you don't block with PERFECT timing, and doing that while someone unleashes a super combo is nearly impossible, if he missed one he would be dead meat. AND after he was done blocking he counterattacks with his own super combo and wins the match. Yeah... that's it. :>
I remember that video.
It's remarkable because parrying is annoying to do. You have to press forward or down-forward at exactly the right time, and the special that Chun-Li did switches a lot between low and high attacks.