Flash crowds, and similar doomsday scenario's were predicted during the mid-to-late 90's as well. Back then it was html, today it's you tube videos, and tomorrow it will be HD videos.
Most of this is taken care of by CDN's (Content delivery networks) so this is not as big of deal as its made out to be.
I read this article yesterday. It's completely ridiculous.
If I understand correctly, the limiting factor that we're up against is the speed of light. Granted, not everyone has fiber-optic connections at home yet, but I'm pretty confident that the telcos will take advantage of the opportunity to upsell customers if and when it becomes necessary.
The bottlenecks would be in the backbones, and fixing that means more equipment and more lines. Rub money and smart people together and you can fix that right quick.
Most of this is taken care of by CDN's (Content delivery networks) so this is not as big of deal as its made out to be.