HTML5 is not an alternative to Flash in the here and now. It will be awhile before HTML5 is in a form that even allows tools to be developed for it, much less before web sites and all the browsers support it consistently and fully enough to consider. But certainly it can eventually reduce the reliance on Flash as well as some of the 'Web 2.0' technologies now in use. I'm sure Dreamweaver will be updated to support HTML5 doctype when there is one; Adobe is not against HTML5, and can't afford not to have good tools for it.
Meanwhile, the potential for Flash is not limited to its use in browsers and for annoying ad banners. The prospect of being able to write applications (AIR) that can share code and development tools across diverse platforms is an attractive one. For iPhone/iPad, Adobe has demonstrated that it's possible to make an AIR application look like a native iPhone app (apparently several such are available in the iTunes Store). I have no idea what compromises are involved there, but it's viable enough that Adobe plans to put this capability into CS5 Flash, which will be coming out this year. And when Flash Player for Android, PalmOS, Windows Mobile etc. is available, it will be easier than ever to create applications that run on multiple mobile platforms (in addition to browser support for Flash on non-Apple devices).
Also, Flex (web based Flash) applications are increasingly popular for in-house corporate RIA development & for 'vertical' business applications, and Apple will be missing out if they don't deliver mobile devices that can support it, to the extent that they care about corporate markets.
However it will take awhile for the mobile variants to roll out, especially with so many flavors of Android to sort out. As such, I don't think there is really going to much pressure on Apple to add Flash to iPad for awhile (unless Windows 7 tablets vastly outperform everyone's low expectations).
Hopefully it will be enough time so that Adobe and Apple can work out their differences and deliver a quality Flash Player for iPhone OS (sure, with an option to disable it). It would help Adobe in their negotiations if the 10.1 version for OS X demonstrates significant performance improvements and supports Apple UI Guidelines (for keyboard navigation, accessibility etc. - which as a Mac user, I find the lack thereof really annoying in the current version, specifically for Flex/AIR apps). (Flash Player 10.1 beta is available now, I might have to check that out..)
Assuming Adobe can deliver the goods, it's not clear who else is positioned to compete with them on cross platform client application development (JavaFX maybe? but is Oracle interested in pushing it?). Certainly not Apple, whose solutions are decidedly confined to Apple hardware.
I know Flash has its problems, but it would be nice if it can deliver on the cross platform development thing (so many years after Java's "write once, run many"). Even better if there were 2 or 3 such things to choose from.