The reliability limit with flash is write/erase, not read/write. You can read it as often as you'd like and it and the data should hold for 10 years between writes. You've got between about 10^5 and 10^6 erase cycles. That's enough for buffered storage if you have a well designed flash file system.
There's another problem that is probably a bigger deal-- NAND Flash is much more subject to bit errors than NOR. It was designed to be a higher density, but less reliable, alternative to NOR for media applications like music and imaging where bit errors aren't catastrophic.
There is a premium for higher density at first but in the long run, higher density is cheaper. One 4GB chip now will cost more than 4 1GB chips, but it won't for long. 4 1GB chips have 4 times the silicon, and 4 times the packaging as 1 4GB chip. Eventually physical costs dominate the price.
Apple is well positioned to be the first to do this because they have so much leverage in the Flash market because of the iPod. They also clearly like making things thinner just because they can.
All of that said, I don't think anything will come of this-- at least not in the laptop, sub-notebook, or even ATNN formats. It's just too expensive for too little benefit. Flash is not cheaper than rotating media and I don't believe flash will be the technology to replace rotating media. Something else is going to have to come along.
Everybody feels like flash based mass storage is inevitable because they're becoming more aware of the technology recently through iPods and digital cameras and there's a general feeling that new technology replaces old, but Flash isn't it. Like magnetic storage, Flash has it's own density limits because of the way bits are stored (electron tunneling) and the physical requirements to make that reliable. The bits can only get so dense on the die, and the dice can only get so big because of process yield issues.
Flash is fine for smaller storage requirements. It's just not practical to carry more Flash than the current iPod Nanos. Right now the largest devices around are 4GB (which manufacturers market as 32Gb, don't confuse your bits and bytes). Once you start having to manufacture circuit boards full of these things they become much less attractive. A 120GB hard drive replaces 30 Flash chips, and I'd guess we get to 200GB 1.8" drives before the next generation of Flash starts shipping.
If this is used for anything, I'd imagine it being used for some sort of lifestyle device-- not a full Macbook replacement. Some sort of wireless communicator running mini-OS X with a keyboard and iWork maybe (Apple Tablet Nano Large Format?) but as soon as you try to use it as an actual computer, people are going to start carrying external hard drives around with it which makes the whole point moot.
And who the heck cares about cutting boot time in half? Saving me a minute and a half a month just doesn't justify spending an extra grand...
Sure Wu and ATR may not hold Apple stock, but I don't think that's what the hype is about -- I think they're trying to hype the Flash market.