If true, I believe it would be healthy for the mobile web. There are still developers out there who believe that Adobe will come up with a decent mobile Flash experience, even though it has failed to deliver on those promises for the better part of a decade. If Adobe just comes out says "Not gonna happen", we can all move on and invest our time and energy in technologies that actually have a future.
Unfortunately, users are still going to be demanding for a while that their online flash games work.
The people who currently play Flash games on the desktop will continue to be able to do so. However, if a game developer wants to offer a good mobile experience, they'll have to make it using web standards. And if they're going to do that, why build it again in Flash for the desktop?