There is so much more you can do with Silverlight/Flash than you can with HTML 5. I'm not even sure why they're mentioned together.
WPF being dead...I can kind of believe it. It's been around for almost 4 years now and it still hasn't really taken off. I like it, and it makes drastically changing the look of standard controls extremely easy, but for most developers that's not enough of a reason to move away from WinForms.
If Silverlight doesn't get it's act together, that won't be the case for much longer. I've criticized Silverlight for a lack of ambition before, for example HTML 4 is far better for laying out text than anything in Silverlight or WPF. But in HTML5 there is not only the Canvas element that will let developers do most of the 2d graphical operations they couldn't do in traditional HTML, but it will (most likely) have WebGL which gives web developers a proper immediate-mode 3d API for the first time. Silverlight could have given that to developers years ago, but right now even Flash 10 has a more powerful 3d facility than SL.
As for the complaint from twitter, Microsoft is a big corporation with multiple divisions. HTML5 is getting a lot of attention with the IE9 team. It's clear that the Windows division hates WPF (and probably .NET in general) and has no intention to ever use it, hence the development of Direct2d, DirectWrite and that animation thing that nobody is ever going to use because there's no authoring story for it. Meanwhile Silverlight, WPF and .NET in general come from Developer Tools Division (correct me if I'm wrong) where they still have plenty of support. Basing the Visual Studio 2010 shell and editor on WPF is their attempt to get people to take it seriously, but it's not had much impact so far as I can tell.