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They already do block VZW IP's as well as skyfire's server IPs (they apparently changed servers with the update). They PROBABLY do this under pressure from carriers such as VZW, to cut down on the amount of streaming. Hulu gives the same message on HTC devices which do support Flash somewhat.
I was just glancing at Skyfire's Google Play page. I saw that being able to watch videos requires the purchase of a license key. If I installed SF and purchased the license key, would that bring back the ability to watch Flash videos, which was taken away as of the ICS update?