The link I submitted is indeed both an example of the "Dark Age problem" of HTML5 (that Firefox refuses to support H.264); and that video can be delivered quite satisfactorily via HTML5, without Flash.
We're all on the same page here, we want there to be open standards for video on the web, and that standard will be HTML 5. My point to you is that the current method of proselytizing this is preaching to the choir and not effective to the people that matter. If I ran a moderately successful medium traffic website, and I saw what the CTO said, then saw your response, clicked on it, and found that it didn't work on just about every browser, I would have to agree with the CTO, and then I may not bother expending the energy on switching the content on my site. Its simply a matter of fighting this thing intelligently.
The situation with the iPhone/iPod Touch not having Flash is not hunky dory. We live in a bubble where we simply don't use Flash that much and think "what's the big deal". I am 100% guilty of this myself. I am thrilled Flash is not on the iPhone and I absolutely hate Flash on my computer, exhibit A: http://news.ycombinator.com/item?id=1057673 . However, I can see that there exist use cases outside of my own experiences: I am not an 11 year old kid that plays Flash games all the time. What's scary to me is that a lot of people say that native SDK apps will fill the void here (as opposed to "HTML5").
Secondly, the problems with video on the web are still very real and unresolved. Firefox not supporting H.264 is not just some "bug", they are religiously against it. They refuse to put it into versions of Firefox that ship to countries where patents are not enforceable. It seems that the emphasis will be on the developer/user to figure out the story with that (just like before it was up to you to install xvid or quicktime or whatever, this is BAD). While we see this as a neat opportunity to tell developers to do it "the right way", many business will simply ask "why if Flash already works... everywhere... today". And again, no one seems to address the IE issue. If your answer is "not a problem", this thing won't get resolved.
The big conclusion here is not "Flash rocks". Its hey there are some real but tractable problems. Instead of exhausting our energy trying to convince people these problems don't exist or aren't really that much to worry about, lets use it to fix it.
"...so users and content creators would be thrown back to the dark ages of video on the Web with incompatibility issues."
He's not saying the player won't look good or be sexy or whatever, he saying it will throw us back into the times when watching video depended on what OS/browser/codecs you had. This link demonstrates that exactly.
Instead of laughing at him and brushing of what he is saying by pointing to some demo that doesn't work in most people's browsers, we should take it as valid criticisms and demand the standards bodies get it together and fix these problems.