If you believe in open sourced systems that are extensible and leverage the content of a non-proprietary internet then this announcement is in some ways a short term setback but in the long run everyone, consumers and developers, are going to be so much better off. Bring on HTML5. We can't wait!
As one Google rep told the L.A. Times, "We are excited that much of the technology in Gears, including offline support and geolocation APIs, are being incorporated into the HTML5 spec as an open standard supported across browsers, and see that as the logical next step for developers looking to include these features in their websites."
Believe us Google, no one is looking forward to the cross-browser, cross-OS implementation of HTML5 as much as we are."