> Given the choice between paying the piper's escalator prices for the next
> 20 years or using a Free* codec that is (already) better than flash and
> likely to continuously improve, I'll take the latter every time.
Flash is many things, I assume you refer to the H.263 video transported in FLV containers as used by Adobe Flash. That's a codec from the same generation as Theora, the quality is horrible and it's insufficient for all serious usage.
In any case, it's not a way forward. Video quality on the web has to improve, not remain on the current crappy level. H.264 is considered to be the tool to achieve that, so you have to compare H.264 with Theora, not some ancient legacy codec, which is clearly on its way into obsolescence.
Also notice that H.264 will continuously improve and likely at a much higher rate than Theora since it receives more development resources and is a more advanced design to start with.
> Let's face it, when streaming to mobile devices, quality ain't the issue.
False. Nowadays mobile devices have high-definition displays and this trend will not reverse itself in the future, on the contrary. Just think 5 years into the future.
> When streaming to fixed devices, bandwidth is not (usually) an issue.
False. Content providers have to pay for bandwidth and content consumers often have to pay for bandwidth as well. Just think of mobile devices, bandwidth is expensive there and nobody wants to squander it.