The evolution of the App Economy is a marvelous thing to watch. In March I questioned whether apps for the iPad would develop with the same strength as apps for the iPhone, because more content is accessible through the browser. Jacob Weisberg at Slate discussed the same thing recently in more depth. He exhorts publishers to beware of getting tangled up with Apple for both monetary and censorship reasons.
On the other hand, web content is not fully available on the iPad. Steve Jobs has denigrated Flash for being slow, buggy and inefficient, and has sworn that it will never be seen on the iPad. In its place Jobs suggests HTML5. The problem is that HTML5 does not do everything that Flash does. This recent piece on on Apple Insider explains the shortcomings of HTML5 and why Hulu will not be using it any time soon for their video distribution.
If Hulu cannot use Flash, then its only alternative is to develop an App, which it is reportedly doing. If Hulu has an App, it may charge a subscription as is being discussed. If Hulu charges a subscription, some of that revenue flows to Apple. By banning a rival development platform, Apple is encouraging the App Economy to its own advantage. Thus it is a pity that so many of the early publishing apps have received such bad reviews.