That episode may be more a reflection on Cisco's confusion than anything wrong with the original product/market. (Perhaps with a less neglectful acquirer, Flip would have been a worthy competitor to GoPro.)
It'd have to flip mightily, Pure Digital did consumer "point and shoot" cameras, gopro does actioncams. They're the same thing only in that both are cameras (and then again, so are RED, would you argue RED is going to become a gopro competitor?)
So it's not far-fetched they'd have become more direct competitors, with some sort of 'Action Flip' arriving, if Cisco hadn't essentially given up on retail/consumer video.
(Red differs in form-factor, feature set, pricing, target market, and distribution channel, so no, the same ripe potential for competition with GoPro isn't present.)