Earlier quoted context omitted.
As a counterargument, look at the state of the web today without Flash. Many websites are still bloated, still slow to load, still hijack the back button, still mess with copy and paste, still force same-window-only opening. So was Flash really the issue?
With the flash sites i refer to, the back and forward buttons didn't work at all. Slow to load today is nothing like loading a 1 mb flash app over dialup on a 800mhz pentium iii. I mean copy and paste, like back and forward, were not just l 'messed with'... you often couldn't even highlight text. Flash sites were far worse than the average awful HTML site of 2004, and this is why they're now almost totally dead. Sure…
The reality is just that HTML in those early days was grim - IE and Netscape were making up tags willy-nilly, and any kind of interactivity or media playback was nigh-impossible to achieve without plugins. (Even for static layouts it could be a significant challenge to make things work the same way across browsers and platforms.)
So the result was, for interactive media-driven sites, developers used Flash outside the bounds of what it was meant for, and the back button broke. The alternative wasn't to not break the back button, the alternative was having a big "This site only works in Netscape!" banner, or having no interactivity at all.