I tend to find most laypeople talking about HTML5 aren't too familiar with what it actually gives you, or give credit to HTML5 where older technologies are doing the heavy lifting . There is certainly a move toward replacing all those snazzy homepage flash animations with something that'll run on your iPad/phone/pod but by and large that tends to be just plain ole HTML and Javascript. It's neat but it's not new - it's just in vogue now is all.
The hoopla around HTML5 centres on the <canvas> and <video> tags (and to a lesser extent <audio>). There are of course a sack of other tags but nothing that gets end users hot and bothered. Both the media tags have sketchy browser support (different implementations in Android/IOS) and require different codecs depending on what browser you're using. Canvas is somewhat more exciting (for me at least) but again it has its own cross-browser headaches.
From a developer perspective it's a step backward into the dark ages of sketchy browser support - even if you're sticking inside the mobile spectrum. The nicest thing about Flash is that by and large it "just works" on any platform that'll run it. After that it's just performance tuning.
Like CSS3 and CSS2 before it, the kinks, to some extent at least, get ironed out over time and browser updates.
Flash gives you cross-platform video with a single codec, and its 2D animation capabilities eclipse any current browser's canvas support (desktop or mobile). Flash 11 brought a bunch of upgraded 3D capability, and anyone who saw Adobe's jaw dropping 'molehill' demos would be hard pressed to conceive of a similar result using current native browser technologies.
I'm not a flash-for-the-sake-of-flash guy, but games are where Flash really shines, and where HTML5 really doesn't. This is largely why, I believe, Adobe has chosen not to pursue Flash for the mobile platform -- because of the existing rich app/game offering for mobile more or less obviates the need to muck about with flash-based browser games.
Funnily enough, for all its advocacy, Apple's implementation of HTML5 media is pathetically restrictive. You will play media only in the manner that Apple says you can play media. Forget, for example, playing inline video on the iphone until Apple decides otherwise. I know Android (at least earlier versions) did similar things but therein lines the issue - different vendor, different implementation. HTML5 is either a standard or it isn't. Cherry picking feature support is just annoying at best.
... so to return to the topic (at last) ... until HTML5 can do everything flash can do, why not use flash? More to the point, why not allow flash on IOS? It'll likely never happen but just because Apple says it's not a good idea doesn't make it so.