It's more like the web browser war with IE6 winning and no further development between 2001 and 2006 halted the web development. The AJAX technology was added to Firefox in the meantime (2004) so that IE5+ and Firefox supported AJAX and Web 2.0 was born. As W3C XHTML 1 and especially XHTML2 failed, HTML4 was enhanced to HTML5 thanks to the WHATWG.
SVG was well known in early 2000 but only Adobe provided a plugin for IE. No web browser supported SVG.
There was also the SMIL standard that is an replacement to Adobe Flash: http://en.wikipedia.org/wiki/Synchronized_Multimedia_Integra... , http://en.wikipedia.org/wiki/HTML%2BTIME , http://en.wikipedia.org/wiki/XHTML%2BSMIL
As Adobe bought Macromedia and the focus shifted from vector animation to video and 3D. The feature creep with Actionscript 2/3/Flex/3D-API/etc. decreased the stability and quality of Flash. The mobile counterpart FlashLite was always several features behind the desktop version.
But Flex. OMG Flex. Trying to bend 180° to serve developers was never going to work. After that it was all downhill.
Tokyo Plastic's Drum Machine: http://www.albinoblacksheep.com/flash/drum
... from 2003 (or earlier?): http://board.flashkit.com/board/showthread.php?516504-rockst...
Here is Shumway playing back this fantastic animation:
http://www.areweflashyet.com/shumway/examples/inspector/insp...
In that animation, look how the black outlines against the grey clothing leaves a white blur. That's a fundamental flaw that's been with canvas since the beginning, and is a severe problem in the general assumptions of immediate mode rendering. It's especially terrible when doing tiled 2d, or polygons, where these transparent edge gaps stick out the worst.
There's still stuff you can't fully do with JS on all browsers with market shares large enough to cater to. The problem with Flash IMO was more how people used it than the technology itself; if we wanted to make sites with large photo backgrounds that blur and have some slight movement of elements, that was pretty easy to do with Flash 10 years before it became easy to do with JS. The vector stuff was huge at the time.
Lastly, re: CPU usage (mentioned in article), Flash could be a hog, but plenty of sites still eat 100% of 1 core just to re-sort a list of things on screen on a maxed-out rMBP because of their poorly-implemented logic in whatever the new JS framework is this week. Flash at least wasn't usually that bad, and graphics smoothness was way higher with Flash than stuff I've seen using JS animations.