The flash game development community has had it good for a while, but recently developers have been turning elsewhere.
Unity3d and the popularity of iPhone and iPod are likely to blame.
Unity allows in-browser 3d which makes flash 3d look like a joke.
Apple decided not to support Flash (wonder why, right?), but made it a lucrative game development platform for monetization.
Unity3D allows developers to target iPods & iPhones, but there are other options as-well, free and (mostly) commercial.

And starting with Flash CS5, adobe will allow flash developers to target iPhones. Although Flash is used for other things as well (where the main competitor is Silverlight), for indie game developers this will allow to develop for multiple platforms easier (if they don't like learning unity3d or torque), especially since so many developers have experience with flash.