There is a few reasons that make HTML 5 a threat to Adobe Flash, HTML5 is a open standard based on the HTML standard, but Adobe Flash is Adobe proprietary product, HTML 5's development cost and cycle is more competitive, compatibility, cross-platform issue and real world business strategy.
First of all, open standard versus proprietary, in a developer community, open standard normally will be more popular, the number of web developer with HTML/JavaScript skill is more than Flash/ActionScript developer, they would easily learn the new HTML 5, so more developer will be eligible on writing HMTL 5 application, as open standard, HTML 5 will encounter less security problem with the active contribution from the community, which is a advantage as well. Technically, the HTML 5 have considerable rich feature, a few Googlers developed Quake which run on browser using HTML 5 which is a very impressive of the demonstration of functionality. As both HTML 5 and Flash aims to create rich web application, if HTML 5 is more popular in developer community than Flash, it is definitely a threat to Flash.
For the development cost and cycle, for HTML 5, even using a notepad, a developer can develop a HTML 5 application, but this is not the case for Flash, you need to have the Flash development IDE for the development which have the cost, it already hinder some start up for the Flash development, as more HTML 5 ready developers will be in the market as mentioned in previous paragraph, company may consider hiring HTML 5 developer who may cost less to do the same application. With the open standard, application can stay at the edition without realizing the updating of the standard, or write one for all supported browser, for Flash, development and testing may need to be taken place for every version of Flash client. As cost is already in the consideration for the industry, this could be a disadvantage of Flash.
Briefly explained at above, compatibility will be a concern, HTML 5 will be compatible for all supported browser, this is not a problem, in contrast, Flash is a platform-dependent software, you need the Flash client to play Flash, if the Flash client is not available on specific platform, it will be out of the business, Apple iOS will be the case, Flash totally cannot gain any market share in iPhone/iPad section (and iPhone/iPad own a big lot market share in the market), a company would more likely to develop the application once and put it in all platform, instead of asking developer to develop one version for Flash and one version for iOS. If there is bug of Flash client, you need to wait Adobe and it may not easily workaround, if there is version upgrade, you also need to verify your application carefully to check no break in it. HTML 5 won't have these kind of problem.
In real business world, Google and Apple is actively contributing and promoting HTML 5, as these two technology giants have their business motivation (Revenue driven by advertisement, browser market share, etc.), it is not easy for Adobe to win, Adobe already cannot enter iOS market which greatly lower their market share in smart phone business.
No matter in technical sense or business sense, Adobe Flash is in the lower ground, if there is nothing dramatically change, the market share of Flash will be decreased significantly, however, it don't be it will be “killed”, but it will change form majority to minority in the rich web application market. It is not the fault of Adobe, it is the technology trend of computer industry.
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