Apple was able to draw a line in the sand and said "Web standards, or nothing", and the industry listened. There is not a major media company that isn't thinking about how to reach iPad/mobile users, and web standards are now the best way to do it.
And there just happened to be this HTML5 thing that, among others goals, sought to replace proprietary video with something else. Without that, what would brightcove be streaming? Quicktime? Would they be updating their infrastructure solely to support Apple gadgets?
Apple is but one player in the drive to oust Flash.
Everyone knows that there are still no good tools to replace Flash's development tools, and sites which used flash before, are unlikely to switch only because of the iPhone or iPad (the iPad isn't out yet and the iPhone only has a tiny marketshare). Furthermore, FLASH DOES MORE THAN VIDEO! I am sick of every Pro-Apple article pretending as though video is its only purpose.
I'm sure Flash does more than video, but I've been running (on Windows XP/Firefox) FlashBlock for the last four months, and I've never seen anything but Video and SlideShows when I've clicked on the "F". I'm guessing there is an entire game ecology that I've never tripped across, but, well, the iPhone OS isn't particularly lacking in that area... :-)
And now that's stopped?
BTW, "scrambling" is a bogus description. My G1 has no flash support. Google didn't didn't seem terribly concerned with shipping without it, though if and when it becomes available it will get added. It's not as though all the other mobile players have been treating Flash as the Ur media format. Mostly it's been "take it or leave it."