HTML 5 hopefuls will be holding their breath for a very long time. It will take 2-3 years before it's all finalized; plus the other big problem it that even when the spec. is ready, many Web users still won't have the latest browser to even view HTML 5 video.
As of this post the global IE browser stats for Jan. 2010 are: 10.41% still using IE 6, 15.59% using IE 7, and 23.69% using IE 8. That is a total of 49.69% IE users who "cannot" view HTML 5 video. You will need IE 9 to come out and then you will need every single IE user to upgrade to it. So the actual use of HTML 5 will likely be 3-4 years from now before you see web developers with much confidence to start coding for it.
On the other side of the controversy coin, is that Flash on the iPhone is not really the issue for Apple. Apple also doesn't want Silverlight or Java on it either. The "real issue" is all about money. Apple gets a 30% cut for every application sold through their store (and they love that). The problem to them, is that IF Flash was available on the iPhone, then people would just start using the free apps. and playing the free games on the Web and stop buying as much from the Apple store.
Unfortunately for Apple though, most all cell phones except iPhone and iPad will have a Flash player 10.1+ available by the end of 2011. Whether Apple likes it or not, people just want to have a choice for their Web experience. If you don't like Flash or don't want it running while you surf, you can just turn it off, however, it has to be available first!
Apple is going to get a big lesson this year, and that lesson is that people don't like it when you mess with their freedom of choice and their Web experience. If you are a Flash hater then fine turn it off, but if you want to use Flash then you should at least be given the choice to use it if you want to.