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Something running in user space being able to affect something else that runs in a separate user space process is a failure of OS security, more specifically process sandboxing, IMO.
When my mail client crashes, I don't have to reboot my PC because the UI has basically turned unresponsive, only leaving me with a useless mouse pointer floating around. Why should it be different with Flash ?
Flash has two basic features: 1) It can run fullscreen, hogging all input, and 2) it can hang. At that point, the user won't be able to regain control of the console without some equivalent of the Windows three finger salute, or a remote login.
But OSX has such a thing as system-wide keyboard shortcuts that applications shouldn't be able to disable, like the Exposé button and a Win9x-ish "kill app" three finger shortcut. I'm sure kawai is knowledgeable enough about OSX to remember about both. Yet he still had to do a hard reset.