Flash will always(ish) have a purpose. It brings extra 'closer-to-the-OS' features that only a native plugin currently can. Its just that the particular features for which it has recently been popular are now available directly from the browser via CSS3 and the HTML5 features. Flash will find some new things to add and the world will keep turning. That said, I think we've seen the peak of its popularity, which was largely enabled by good fortune anyway (ubiquitous video capable internet connections turning up and the browsers not getting their shit together).
Flash (or at least, SWF) is still far and away the best option for building 2D games for the web. The desktop as well, probably, considering the state of Director... and if they actually put in some effort, it could even be a great option for multi-platform console game dev (think XBLA, PSN, Wii Ware).
Until there is an authoring tool as strong as Flash for Html + Javascript + css (with regard to animation and design, and the ability to integrate these animations and designs with code) - then flash is still the best game in town for games, animation, and more...
I'd like to hear everyone's thoughts on the answer to animation. Sprites are heavy, but are the only other option I can see. Even still, there is no authoring tool better than flash for animation on casual games or the web.
Hardly. While HTML5 is great, most of the animations I have tested out still red line my processor. While you can hate Flash Player all you want (and I hope HTML5 takes over), artists will still need an authoring tool like Flash CS to do anything useful with HTML5.
http://www.apple.com/hotnews/thoughts-on-flash/
and the HN submission is here:
http://news.ycombinator.com/item?id=1304310