I remember reading about this, but I'm still a little shocked that it actually came to pass. I suppose you could interpret this as Microsoft deviousness to subvert Flash for competitive reasons, but as I have no real reason to believe that I'll instead give them kudos for refusing to kowtow to patent extortionists.
(I also immediately wonder if you could use JS to automatically hit the spacebar for your users. Maybe then the patent can be neatly circumvented and webmasters can learn they just need to cargo-cult a JS snippet to make Flash work.)