Job's open letter seems to succeeded in at least one task: it has kicked off a flurry of conversation which isn't entirely about Apple shutting out a major form of web development. Microsoft just found itself explaining an earlier post about HTML5 video support which people mistook for "dropping" Flash, where in reality plug-ins will work in IE9 as one would normally expect (and really, why wouldn't it? Microsoft still delivers Silverlight via plugin). Anyone who thought Microsoft was going to "ban" Flash needs to take a few steps back: Microsoft isn't deploying a closed box consumer product where they control all the software that goes on it - they're developing a web browser. It's like comparing apples and bromide, and there's no logical reason why IE9 shouldn't be running all the Flash apps out there. Doing otherwise would be browser suicide.
Then you get the other side of crazy, like this post on Beatweek about why we should bash Flash - which is just as much flame bait as it sounds like, describing Flash as "outdated junk from the Geocities era" and calling for it to be summarily executed. Which is patently ridiculous - Flash holds a position on the web which cannot currently be replaced.
Let me say that again, as it may keep people from freaking out prematurely: Flash holds a position on the web which cannot currently be replaced.
Here is reality:
Short, short version: when you pull the focus back to the Internet at large: Flash is still a necessity for delivering rich content. A recent video highlights the distinctions quite well. You can also read a recent Gartner post reaching much the same conclusion.
Apple doesn't really care much about the Internet at large, they are far more concerned with the Internet at the very small: on the iPhone and iPad. Jobs has a set this up as a "past versus future" argument - but that is far too myopic to be useful. This is a PC versus mobile argument - and even more of a "PC versus PC-like mobile devices" argument. And this evolution is real, as others are noting:
PCs are becoming commodity items. The price of PCs and laptops is falling by about 50% per decade in real terms, despite performance simultaneously rising in real terms. The profit margin on a typical netbook or desktop PC is under 10%. Apple has so far survived this collapse in profitability by aiming at the premium end of the market — if they were an auto manufacturer, they'd be Mercedes, BMW, Porsche and Jaguar rolled into one. But nevertheless, the underlying prices are dropping. Moreover, the PC revolution has saturated the market at any accessible price point. That is, anyone who needs and can afford a PC has now got one. Elsewhere, in the developing world, the market is still growing — but it's at the bottom end of the price pyramid, with margins squeezed down to nothing.
Don't be mistaken: I think HTML5 holds a lot of promise for the web, especially for allowing the Internet to behave more like native applications in general. I think over the next couple years the overlap of HTML5, Flex, and other RIA tech like Silverlight will be quite interesting. Right now if you have an audience you can hook into Chrome or Safari, HTML5 holds some interesting possibilities. I actually think HTML5 is pretty awesome and am quite happy to be taking it out for a ride, professionally speaking, lately.
That doesn't mean Flash is teetering on an edge, however. Let us also note that Jobs' solution to a lack of Flash on the iPhone and iPad was not, by any means HTML5. If you thought that, you didn't read closely enough. Jobs is clearly saying: anything you can do in Flash, you can code in Cocoa.
So everyone relax: the majority of piano playing cats will be delivered tomorrow much in the way the way they were yesterday, and that will continue for some time to come.