I do agree though, that complex browser apps just don't work on mobile Flash. I had been hoping that maybe somehow Adobe would get it to work, but obviously they haven't. And now, officially, they won't keep trying.
While iOS would be the major platform for heavy applications, lightweight utility apps get more and more developped in a cross-platform manner. And as a user I don't feel a great loss, since the apps are more often updated and are OK for the job.
Being a second-class citizen should be less damaging now than at the time we were running clunky java or Qt apps on windows or OS X, like a few years ago.
At least we'll get used to it, and it might become the norm for a whole class of apps.
For the position of AIR...it's compile compatible with iOS, android, it has a runtime on Playbook and the upcoming BBX, it seems to be OK on windows phone as well. I have the feeling that it is where "we" really wanted to see Flash move forward. Not as an HTML extension, but as a real immersive platform.
Adobe AIR is a much more adapted and competent environnement, and it's getting more traction that ever. Seems a pretty sunny landscape for AS to me.
The AIR runtime is there for serious applications, and I would expect it to be much funnier than webapps.
Edit: About Flash on android, there's the free, open submission process for full featured apps on android. An app would obviously be a better match for complex applications than Flash on the browser.