Flash is needed on the iPad if it's to be useful for browsing websites. Entire websites like Youtube become unusable as well as parts of countless other sites.
Not true at all, YouTube has been usable on the iPhone since day one and has an HTML5 player for browsers. Vimeo and DailyMotion also support the iPhone OS and HTML5 in the browser as an alternative to Flash. That's three of the largest video sites out there, and they all offer an alternative to Flash and work with the iPhone OS. Several companies I work with offer iPhone specific sites with video that can be viewed on the iPhone, no Flash required. On top of that, gaming websites like Giant Bomb support video like their game reviews on the iPhone through their app.
Hulu is the big one that's missing, and I would bet on them offering a non-Flash solution at some point in the future.