HTML proves to be a resilient language. I found the following statement on the Official Google Webmaster Central Blog.
“As many of you already know, Flash is inherently a visual medium, and Googlebot doesn’t have eyes. Googlebot can typically read Flash files and extract the text and links in them, but the structure and context are missing… Try to use Flash only where it is needed. Many rich media sites such as Google’s YouTube use Flash for rich media but rely on HTML for content and navigation. You can too, by limiting Flash to on-page accents and rich media, not content and navigation.”
The problem is no longer that flash is not readable by search engines, but it is not possible to deep link to content within a flash document. Since pagerank is based on inbound links, that problem remains. Search engines also rely on semantic mark up, meaning a good information architecture showing the hierarchy of the information, so that Google can rank keyword and phrases.
The problem is probably goes even deeper, flash is a visual medium, and html is by nature made for semantic markup. So it is difficult to imagine that flash should ever cash up with html. And maby the web is not a visual medium, reading this I realized that there is no websites, that I visit regularly that can be considered flash sites. I visit google, youtube, facebook, iGoogle, imdb, techcrunch, amazon, wikipedia etc.