YouTube links do open the YouTube app, but embedded YouTube videos also work just fine inline. If you open youtube.com in the browser, videos also play in the browser. Vimeo and other video sites also play directly in the browser, no app required.
You can't play Flash video in the browser, but that doesn't mean you can't play video in the browser.
The security of Flash video is a myth, as rtmpdump has had RTMPE support for a long time (though Flash has been ahead of the cat and mouse game for temporary periods), and Replay Video Catcher provides a more general solution. "Securing" HTML5 video would be a shameful waste of time, as it would inevitably mess up Linux etc. with no actual benefit to publishers.
It doesn't have to be 100% secure, it just has to be more secure than right click -> save as. Torrent sites aren't getting their content from Hulu or Netflix.
Securing HTML5 video is the only way we're going to have Hollywood content stream over the web again. That's just reality. But it's looking more and more like these types of appwalls are what the future holds for the web.
Torrent sites don't derive content from Hulu or Netflix because the quality is poorer than iTunes. There's no conceivable reason for pirates to settle for a 1 mbps Netflix stream when the 6 mbps iTunes is available.
It has nothing to do with the security. (Heck, iTunes video has some kind of DRM attached.)
I really wish people wouldn't use "secure" to mean "laden with broken DRM and other misfeatures that serve publishers by antagonizing users." That's not "secure," that "broken."
Yeah, YouTube has been serving up HTML5 video along with Flash for quite a while now (presumably based on some kind of browser sniffing, though I think you can configure your account to send it to the desktop as well, if you're logged in).
You can't play Flash video in the browser, but that doesn't mean you can't play video in the browser.