If you've used flash on a rev.a MacBook Air, you know how truly repulsive it is. The second I began watching even a SD video on Youtube via Safari, the fans would jump to 6200RPM, the computer would slow down significantly and it was just an experience I would not want to relive.
The iPad has a 1GHz processor and it is logical to assume that the iPad is not nearly as capable as even the Rev. A MacBook Air. If flash was crippled on that, I don't want to imagine it on the iPad.
There's Youtube (+Youtube HD), with many sites supporting iPhone optimized videos, and apps like the NyTimes app (with integrated, in-line video) eliminate the need for Flash on their sites. For the rest of the internet...We can either wait till Adobe releases a version of flash for OS X that doesn't suck, or we can hope that the rest of the internet does a, like marksman said, "upgrade".