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.
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.