There has been a lot of buzz in the (scientific) twitter/blogo-sphere regarding this. The main point of contention is essentialy the % of functional element ENCODE annotates. As it turns out, their criteria of denoting a DNA element as 'functional' is debatable (i.e. a DNA sequence with biochemical activity). These elements when deleted from the genome often has no visible phenotypic change to the organism (us), which is why the % they put is believed to be way too much.
Here's a recent excellent blog post on the issue, in readable form to the layman: http://selab.janelia.org/people/eddys/blog/?p=683