This will be great for gnash. I'd love to see desktop Linux distributions shipping with a solid, open source flash player.
Firefox has hung one too many times when trying to play flash content over the last year or two, so much so that I use flashblock by default and only enable what I really need.
I don't understand why they would want to do this. What does it buy them? More seats of developer tools? The same question can be asked of Sun and Java.
The endgame for any "platform" software technology is an open, freely available, ubiquitous spec. Flash is, within its current domain, ubiquitous and free-as-in-beer. Only the open part is missing...
And that means that it could be dethroned on mobile devices: unique Flash builds everywhere will increase the cost of the platform over time, become a support nightmare, and eventually make users switch to a more open alternative. As it stands platforms other than Windows and Mac are second-class citizens, either having buggy/lowered performance(Linux), or supporting only older versions of SWF. (Wii Opera, mobiles) This is not a good track record.
So Adobe should be applauded for this move. They aren't stupid, and they still will have some control over the spec into the near future, since they possess the premier dev tools. (I love MTASC/haXe/SWFMill, but must admit that they have shortcomings.)
It buys them relevance in the face of Microsoft. Flash may be on nearly every browser, but Silverlight is only one Windows Update away from similar numbers. Adobe watched the .NET CLR rapidly eat Java's pie, and now the same technology is targeting Flash.
To be competitive with .NET, Flash needs at least as good a developer community, which means it needs to be at least as open as the CLR (which is an open standard, various patents notwithstanding). The sad thing is that a third-party developer community has tried to grow up around Flash for a decade now, but until recently Adobe has done little to encourage it, simply to protect Flash sales and outrageous Flex server licensing fees.
Firefox has hung one too many times when trying to play flash content over the last year or two, so much so that I use flashblock by default and only enable what I really need.