As I said in the discussion of the subscription drop, we can infer what Blizzard's numbers are telling them by their subsequent actions. This is a clear signal that Blizzard thinks that people will not unsubscribe because of the lack of flight. That they believe the expansion is stronger and more attractive without flight, and that their internal numbers are backing that view.
That in turn implies that for most people, lack of flight is not a deal-breaker.
Personally, as I've mentioned before, I don't think flight has been good for the game. In fact, going over my older posts, I found this post from The Burning Crusade, about two weeks after I hit 70 and got my flying mount. It's kind of amusing to look back at it now, as it nailed the play-style changes and some concerns for future development:
Now with a flying mount, [questing is] very different.
Step 1: Aerial Recon - Scout out the location and find the quest mob.
Step 2: Paradrop in - Hover directly above the quest mob and dismount so you fall to the ground right there.
Step 3: Kill the target, get the quest item.
Step 4: Jump out - mount up and take off.
Very commando-style gameplay. It's interesting because there are a lot of design implications for this playstyle.All in all, I think it would have been better if flight had never been added or if it had been designed differently.
For example, imagine if you could not hover. If your mount was limited to the ground until you had moved forward for X seconds in a straight line (getting X momentum) and only then could you take off. And then your mount was always moving forward, so you could not hover in place, but had to circle around.
Basically make the true commando-style gameplay inconvenient, but still allow flight for travelling long distances and generally allowing freedom in the air.
All in all, the only real surprise in Blizzard disallowing flight for the full expansion is that it once again proves they are willing to cut significant existing mechanics if they feel it is damaging the game. Flight, reforging, and even the auction house in D3 are all examples.