Are they only willing to use copy protection designed by the makers of the operating system they are using? I'm just speculating but this seems to be the case for ps3, xbox, wii, mac, pc, ipad.
It's especially plausible because it frees Netflix from responsibility for content protection systems across platforms -- if one of the targets is compromised, the studios have to deal with the hardware vendor, not Netflix.
The office manager at my workplace found her Verizon stock OS slow,and prone to occasional crashes in trying to understand why, she stumbled about (google search)a howto article on replacing the OS in two clicks (using unrevoked, adding a zip file to your phone, and clicking some key combination), having done so, happy and empowered by the change she performed, she instructs other nontech how to own (!!!) their handsets.
The point of this story is that:
1. This is probably the intention behind why google allowed this to happen (if you check XDA developers, its thriving). in this sense phones are different then full fledged computers, hacks tend to work fine and even better then the bundle, certainly cleaner. you can download and replace your phone ROM on the fly now with rom manager (available on Google app market, and try several flavor for your own phone, (with/without htc sense, clean froyo etc..) restoring your bought apps is simple, just log into your Google account, and re download.
2. The Movie industry will shun a platform that non sanctioned (i.e not supporting DRM) developers and users can easily command, Netflix has no choice but to comply.
I see them as pretty much indistinguishable, but maybe my perspective is skewed: my cell phone (HTC Incredible) and my laptop (Thinkpad X31) have roughly comparable processors and both run Linux. There's some differences in API, but I don't see anything inherently different about them. As time goes on, I think the blurring will continue.
How many android devices run flash
I'm not sure, but I presume that anything running Android 2.2 will. This should include all high end phones sold this year, plus everything for the future. I think most of these run it well, and would bet that all future Android phones will.
What part isn't 'quite true'?
I feel it is false to say that either Netflix or the studios require that the DRM be provided by the underlying OS. I think this is proven the existence of Netflix streaming to Silverlight in OSX. The ability of Hulu to use a flash solution also casts doubt, but this might depend on whether 'they' refers to the studios or to Netflix. But if it's a Netflix requirement to require OS level DRM, I'd wonder why they have this requirement.
It's the 2nd question which puts perspective on the first. No one is raving about Flash performance on Android. Netflix isn't going to release a client with poor performance. Everyone will blame Netflix for it. Of course future Android phones will run Flash fine (faster processors, more ram, whatever), but that's not a solution today. The Netflix Android clients have been in development for months (see their blog posts) and will be released in the first part of 2011 (few months). Will those Android phones that have no problem with Flash be here in a few months? If so, how many of those will there be in comparison to the install base now that netflix is trying target?
Does anyone provide a content protection framework for Android?
See that question? It's talking about 3rd party solutions. Not about DRM being provided by the underlying OS. Not sure why you are hanging on that point to call out Netflix's blog response as BS. Irdeto provides the content protection framework for Netflix to use on GoogleTV. Netflix isn't requiring the OS to have one. iOS and WM7 happen to provide their own, which is why they have clients already. Android doesn't and no one provides one.