I agree with Yehuda that any good browser platform helps promote web apps, and HTML 5 makes this even better. One point of disagreement: I think that it is awful to not have a sandboxed Flash implementation so the device could access hulu.com, conference videos, etc. This rules out my wife and I buying one of these because I would not by a web browsing device that could not access quite a bit of web content.
I agree that in the short term, not having Flash will wall off large sections of web content.
However, if the iPad takes off we will have to either provide alternate content or abandon flash on our heaviest flash sites. The web design company I work for will probably switch to standards-based Javascript animation and HTML5 video with the usual fallbacks for IE6. We already use JS for many things that used to be flash, like menus, slideshows, galleries, and animations.
When it was just the iPhone/iPod touch, with their relatively small browsing traffic, it was easy to shrug it off when a site didn't work properly. Expectations will be different with this device. My clients will be asking why their site is broken on their iPads.
The big video sites will implement an HTML5-powered player for the iPad because it allows them to go around the iTunes / App store model. Smaller video players will probably make the switch sooner.
Apple may be doing the developer community a favor by giving us a reason to leave flash behind. The runtime is fine on Windows but sluggish on OSX and slow and buggy on Linux; it's frequently using more CPU time than anything else on my system and often has terrible video playback performance.
If you're going to stream Hollywood content, you'll need Flash. You'll find that Hollywood content on YouTube is delivered in rtmpe:// only, while all other content is MP4 downloaded via http. Hulu is pure rtmpe.
