I still am not sure why at one point flash players suddenly became a lot slower on older hardware (like Flash 9 worked great for 720p YouTube videos on old pentium 2 systems, then flash 10 comes out and 720p videos are slow as hell?), but I was thinking, why not design a player that front loads decoding so that the video plays in full uncompressed form thus requires much less resources? Yeah, the decoding will add to wait time to begin watching the video, but it is better than 10 frames per second.
Basically, the player would not be uncompromising in real time but rather uncompress and then save the new converted file for playback.