The elephant in the room is pornography. If people are offered an internet experience with porn and one without, they might just choose the one with. I think this is going to be a bigger factor than is being written of right now for getting Android market share. Mobile Flash is a big deal.
to go back and correct myself: a friend made clear to me that porn sites play video on the iphone already, via a quicktime player that loads up when you click on many videos.
It's good to see they're still as focused on the user experience as they always were.