The big advantage of Flash is that you write once and it runs everywhere. Anything that leaves it up to browsers to implement will not be able to boast that any time soon.
Flash works fine on OSX in my experience. A good portion of our startup depends on it, and my cofounders code on Macbooks.
If only Apple were to create some hook for WebKit/Sproutcore that allowed iPhone web applications to do something with finger touches (this is difficult because of the pinch gestures require mouse/t-pad tracking - but maybe they can have a JS API hook to toggle/disable pinching for webapps)