Flash offends even when well-intentioned. It is a crutch for lazy web designers, allowing them to create showy pages which obscure content and are horrendous for people with accessibility needs
Granted, accesibility is a legitimate concern for most websites.
Accessibility aside, a quick glance at visitor statistics for a given website will likely reveal that the Flash 9 or 10 interpreters are supported by more visitors -- far more -- than any particular browser family, IE*, Firefox, the Webkit family, etc. Even if you group the mostly standards-compliant browsers into a single category, leaving old IE versions aside, Flash is still more widely supported than all of them combined at most sites.
Now, combine this fact with another: Flash does not seek to provide anything that most browsers support alone. It does not seek to duplicate [X]HTML+CSS+JS. Instead, it seeks to provide a high-performance API for timebased animation and object-oriented layout with full typographic support, compositing, and most of all, localized, hardware-accellerated computer graphics and multimedia playback.
I'm sure you're aware that to a desktop application programmer, the HTML+CSS+JS mishmash is obviously a very poor way to put together a GUI, not to mention an abyssmal way to do dynamic graphics and sound. From a software developer's perspective, Flash is not a "crutch" for "lazy designers," it's the only widely adoped tool for certain jobs. If you think Flash is just a design tool, you've missed the point. It's a lightweight application framework.
There is only way to write widely supported web apps that work like desktop apps but run in the sandbox of a browser. We know what it is. It doesn't matter that it's proprietary, or that the Flash IDE is a bug-ridden manurepile with no good drawing tools. It doesn't matter that until Adobe took over Flash, its standard library and language were perverted parodies of good design. It doesn't matter than Adobe refuses to fix certain maddening bugs they inherited from Macromedia's early versions of the platform. As long as there's just a single, widely supported way to do computationally intensive multimedia and GUIs on the user's local box, developers on certain kinds of projects will be forced choose that platform.
If you don't like Flash because the libraries and plugin interpreter are proprietary, then you need to assemble an open solution, one with powerful standard libraries and a pleasing language design. Then you should hit Adobe where their product is weak: make an IDE that gives you better layout, animation and drawing tools than the Flash IDE, and while you're at it, ensure that yours really works as a programmer's IDE. Debug the IDE's user interface; that'll give you a leg up over any version of Flash. Then publish it and get it widely adopted by browser users.
At the very least, ensure that 98% of all browsers fully support a common standard for animated vector graphics. (Sounds easy, right?) Until then, people who need this sort of thing have no choice.
There's obviously great demand for this kind of plugin, and so far only Flash fills that niche. It's rather pedantic to complain about the niche.