Yes...but consider the consequences of releasing hydrogen-releasing bacteria into the environment. There is already work going on in this area, and it is far more meaningful than getting an extra three percent out of fuel cell efficiency.
Lastly I see pollution as one of those problems which is easier to work on when you concentrate its source.
Nope, the environment is quite capable of coping with diffuse pollution. In is when it is concentrated that bad things start to happen. The problem with hydrogen powered cars isn't pollution or how or where the energy is generated, it is economic.
We don't have hydrogen powered cars for the same reason we don't have Chuck E. Cheeses on Mars: the economics of the thing stink. Just like space enthusiasts who want the government to brute force the situation with other people's money, hydrogen enthusiasts are only making the situation worse by injecting the government.
If someone eventually finds a cheap way to produce hydrogen or electricity becomes cheaper than oil nothing will stop hydrogen cars from coming in force. And until that happens, nothing can be done to make them come.