Here's the relevant code from latex.ltx
\def\verb{\relax\ifmmode\hbox\else\leavevmode\null\fi
\bgroup
\verb@eol@error \let\do\@makeother \dospecials
\verbatim@font\@noligs
\@ifstar\@sverb\@verb}
The \verb command doesn't have any argument; it does some preliminary work and then hands control to \@verb or \@sverb (the latter if it was called as \verb*.
\def\@verb{\@vobeyspaces \frenchspacing \@sverb}
Here we see that \@verb simply makes the space active (already defined to expand to \space) and sets \frenchspacing for keeping all spaces equal; then it calls \@sverb
\def\@sverb#1{%
\catcode`#1\active
\lccode`\~`#1%
\gdef\verb@balance@group{\verb@egroup
\@latex@error{\noexpand\verb illegal in command argument}\@ehc}%
\aftergroup\verb@balance@group
\lowercase{\let~\verb@egroup}}
Now \@sverb reads the first token (the delimiter) and makes it active. Then it defines a check macro for getting out of troubles in case \verb is called as the argument to a command.
Finally it defines the active delimiter to be \verb@egroup; upon finding and expanding it, all the special settings for verbatim mode will be undone.
Thus \verb{xyz{ is legal (try it) but \verb{xyz} isn't. The code might be changed to take care of \verb{xyz}; however, one of the main points of \verb is allowing unbalanced braces in the verbatim text, so there's not so much to gain with that.
{and}are not delimiters. They have a different catcode. If they are converted to active chars then things are bound to break. – percusse Apr 01 '13 at 17:00{and}to be active to use them as delimiters. For example, in ConTeXt, you may use\type{...}for verbatim text. Of course, LaTeX like\type|..|or\type+...+also works. Ditto for ConTeXt packages likefilterandvimmodule that work with verbatim text. – Aditya Apr 01 '13 at 17:03\dospecials– percusse Apr 01 '13 at 17:05\bgroup; if so uses one definition, else uses 2nd definition. See, for example, this implementation int-filter. – Aditya Apr 01 '13 at 17:10xparsedoes this as thev-type argument. – Joseph Wright Apr 01 '13 at 17:28xparseand thevargument. Ultimately, I'd like to define my own command that can grab verbatim text between braces. – user28291 Apr 01 '13 at 18:16