FlipLive is kinda awesome, but as you said... when you’re in a Wi-Fi hot spot... Personally, I cannot think of too many occasions where the average person is: 1)in range of wifi, 2) has something worth sharing with an audience who are available there and then, 3) wouldnt rather use Skype video conferencing so as to get two-way communications. There are a few, but I'm not sure there's enough.
More than 40 hours of video uploaded to youtube every second of every day. A good portion of it is people just sitting in their bedroom talking about all the stupid shit they just bought at Target. And if they could record and upload in one easy step, that's a huge market right there.
I think the main difference is that with Flip Live, you would be able to broadcast a public live feed to a large audience. So basically more like Ustream (one to many) than Skype (one to one). And normally, Ustream users show a live feed from a single fixed webcam, while this would have added an aspect of mobility.
I agree. FlipLive did infact do this (not automatic), albeit with some drawbacks that I cannot discuss in public. Even with those drawbacks, I think this was probably the most compelling use case for the average person.