Sure.

<video ontimeupdate="sendXHR(currentTime)" src="myvideo" controls></video>

...where "sendXHR()" is a five- to ten-line wrapper around XMLHttpRequest.

Indeed. So now browsers can finally start to do what Flash can do. This argument is only recently valid then.

That's the point - it can do whatever you can do, all technical prerequisites are available (threads, background-requests, runtime-dynamic code etc). Once the proper tools are available providing diverse standard functions, it will spread and be easier for non-developers.

Hixie answered your specific question, but I think you're missing a very important point: "Doesn't every major browser release leave less and less that Flash alone can do?" There are some things (not this one) that Flash can do that browsers aren't yet able to do. The present limitations dictate what you can do today, but they have little relevance to the long-term discussion.

I don't want to weigh in on the flash/javascript debate, but couldn't you repeatedly change the src on a hidden image with get variables in the url?