The sad thing is, most leadership has grown up in this culture, so they think that's how it's always been, or should be. They've also grown up with the non-flying culture of the past 15-20 years ushered in by the AF trying to be like a corporation.
Flying hours should be the last thing cut. The reality is, many units have already been living with about a 25-30% reduction in flying hours since 9/11 (which had been cut from pre-GW1 levels) and it's the new normal. Consequently, further cuts to flying hours will move us ever closer to a third-world status. But there is no commander that values his career that will report a drop in SORTS due to these flying hour reductions. They'll moan a little in the staff meetings and then tell the OG/WG that they'll get the job done.
In many cases, the sim will be held up as a panacea for all our challenges. But the sim, as useful a training tool as it can be, will never replace flying hours on a one-for-one basis. No matter the fidelity of a simulator, it will only ever be 1g feel and 2D vision (well, 3D vision may come someday) and can never replicate the sinks, slips, skids or G-feel, nor does it have the depth perception for many of the skills that need to be developed and maintained. The sim is a great tool, but the AF is using it for the wrong things and the wrong reasons...
I'm sure we'll still see EOY spending stupidity because of the way the military (mis)manages its budget which, is in no small part, due to the way the government spends. There will still be new desks and projectors for HQ.
...and I need to quit saying 'we' - I retired last year. Still passionate about it though...