The efficiency of flash doesn't matter much if I have to wait for it to physically get to me, vs just opening up my browser.
It would be way less convenient, though. So I don't. I don't know which device I'll end up watching on, and don't want to deal with syncing and all that shit.
Which is way more expensive than streaming services. Prohibitively so for wide swaths of the general population who don't have tech industry salaries. The cost of one TV show from iTunes can approach the price of several months of Netflix.
With copyright reform, that needn't be the case.
(Note that for many consumers, Netflix is already considered too expensive. Several people sharing the cost of one account is pretty common from what I've seen.)
Fact is that streaming is just convenient. Like really convenient. I wish there was more stuff that I could download and listen to offline, but it's naive to suggest that streaming has no advantages. We stream while data connected because we download things in an ordered manner (vs how normal downloading is done). That's nice that I don't have to wait for a full movie or song to be completely downloaded to listen to it.
Maybe you don't subscribe to channels and the system could never anticipate your whims and desires... but I wager it would work great for most users.