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See the testcase at https://bugzilla.mozilla.org/attachment.cgi?id=523831 on which the yellow square should be on top of the red one.
In particular, the 2d transforms specification says that transformed elements act like position:relative for stacking purposes, so z-index should apply to them.
It's not obvious to me that z-index should apply. They act as positioning containers, but that doesn't necessarily mean that z-index applies.
This is worth a post on www-style.
Consensus was to not have z-index apply.