For the only use case where it really mattered (i.e. development on Windows) that's a reasonable approximation of what has been done. The web plugin, just like other plugins, is less relevant in a fast HTML5 driven web.
I suspect the reason for not saying it in those terms is the enormous storm you'd have seen on the internet claiming that Microsoft were trying to kill off Flash by bundling Silverlight into Windows. From a political standpoint, a few slightly confused or irritated Silverlight developers is probably a lesser evil.