So it's helping to make Flash more irrelevant every day, by forcing developers to finally consider that delivering their content in some executable binary blob isn't a reasonable thing to do on the web.
Thanks, Apple!
I ran Debian on a PPC machine a few years ago so I couldn't use Flash. Back then only very odd setups like that didn't have it. Nowadays millions of people are buying new top of the line devices that don't support it, so the tide is turning as a result.
If Flash will eventually disappear it will be slowly, very slowly. Companies are reluctant to get into new technologies. Has DVD disappeared because of Blu-ray? Has Windows XP disappeared because of Windows 7? What about Internet Explorer? And it's the same outside of the tech industry too.
Some sites will be early adopters, some will be slowpokes and most will be somewhere in the middle. And in this last year we've seen a _lot_ of mindshare being gained by HTML5. For a start Youtube, Vimeo and friends. Let's remember that a couple of years ago Flash was basically had the whole market by itself.
I don't know if the iPad/iPod helped, but I do know that Flash is starting to lose its grip. And yes, of course people will still develop on Flash for many years to come, the same way some companies were still selling VHS players a couple of years ago. But the adoption is gaining steam.
So there's going to be stuff done in flash to appease the designs of sites. But once HTML is more mature, and people know how to use it, they're not going to do the work twice anymore.
Make no mistake, having a major platform like the iPhone/iPad is pushing that forward. It's hard to tell how or when this will turn out.
Apple's non-support of Flash has forced content developers to put down their favorite hammer and explore other tools. It also forces content developers to port their applications and consider the format of the target device.
Microsoft has their XNA platform for Windows Phone 7, and I think that's a great thing, too, as it has been proven on the 360. You won't see direct ports from 360 to phone, it's too wildly different, but it makes developing easier. They're looking for high-quality native applications just like Apple.
If Windows Phone 7 supported Flash you'd just see thousands of trashy Flash games and most would barely work. The user experience would be terrible and people would get the impression that either the phone is slow or the apps are bad and not worth buying, either of which is a very bad outcome.
Like it or not, the walled garden approach is necessary to have some degree of control over the user experience. Other vendors will discover this if they care.
A Flash SWF is not an executable binary blob. Many parts of the SWF spec are even open.
Writing a Flash player is a lot of work, and there's not much reason to do so if Adobe has most computers covered already.
It's easier to write a fully HTML5 compliant web browser than it is to write a fully compliant Flash plugin.