I'm no expert - I'm an interested amateur in the area. So this is a bunch of hot air, but perhaps it's thought provoking hot air. What I'd really like to see is input from experienced people on the topic. Flare and chaff system pyrotechnicians and maintenance crews. Pilots of military turbojet transport aircraft. Missile defense and countermeasure experts.
Bruce Sheiner's work is also topical here - on risk assessment and on rational decision making about security.
this article, despite being NBC news, seems to cover the issues a bit better.
How do attacks happen in the first place
Nobody sane fires missiles at airliners on purpose. Crazy people do, unfortunately, regularly get their hands on man-portable infrared launchers like stingers. Medium range radar guided multi-vehicle missile installations - not so much. The previous ground-to-air medium-to-long-range shoot-down incident of Iran Air 655 was a US military launches against an airliner misidentified as a target aircraft. This one looks like it was probably the same - a horrible accident where the launcher operators thought they were attacking a military aircraft.
It is noteworthy that most airliner shootdown incidents have been attacks by fighter aircraft, not ground-launched missiles - sometimes intentionally, sometimes by mis-identification. Iran Air 644, and probably Siberia Airlines Flight 1812, look to have been accidents/mis-identification.
If it's a fighter jet attacking then countermeasures aren't going to help you. If it's a ground launched missile and the operators don't realize it was mis-identification (like in the Iran Air 655 case where they ignored the IFF transponder), they'll probably just launch again if the first attack is unsuccessful. So the only thing countermeasures will help with is the case where they ignore all the evidence for long enough to attack a civilian airliner, then figure it out before launching again - if the countermeasures do any good.
Medium-range radar guided vs short-range infrared
The bulk of the article talks about an Israeli defense pod for firing flares to divert/distract (not deflect, like the article says) short range/low altitude infrared guided missiles fired from man-portable launchers. The incident prompting it was a medium range radar guided missile that wouldn't be capable of event detecting a flare, let alone being diverted by it. So the coverage of the Israeli flare defense pods is semi-relevant at best.
The article does sensibly discuss over the economic issues of trying to add missile countermeasures to airliners, but ignores the bigger problem: active missile defenses are (in my extremely non-expert opinion) more likely to cause the loss of an aircraft than another missile strike.
Risks of flares and chaff
As alluded to by quotes in the article, flares are pyrotechnic devices designed to be fired without direct human intervention (physical safety device etc), on remote control. So are chaff canisters, which is what you'd need if you actually intended to try to deal with radar guided missiles. Fire on an airliner is a huge problem - landing gear fires have been implicated in multiple aircraft losses. Sure, military aircraft carry chaff and flares all the time, but they do cause problems - and military aircraft are better equipped to cope with any resulting damage/faults too.
They're another system that has to be disarmed on the ground and armed in the air. Chaff and flares firing on the ground could easily be deadly for ground crew or cause damage to nearby aircraft, fuel fires, etc. To be useful for early takeoff defense they'd need to be armed shortly after the aircraft rotates - and I don't know if I'm too keen on having explosives armed in a plane I'm on just as it's entering the most extremely vulnerable and failure prone part of its takeoff where it's hardest to recover from problems.
Effectiveness of countermeasures
Chaff and flares are also of limited effectiveness - missiles are designed to try to ignore them. They only really work well when combined with hard maneuvering - which airliners can't really do well - and early launch detection / missile tracking. So the trade-off is made worse by the fact that the countermeasures are not only expensive and risky to carry, they're also less likely to be effective.
My understanding is that the Israeli airliners' flares have a somewhat decent chance as they have early-launch detection of rocket motor flare and are trying to divert mainly cheap/outmodeled IR-guided missiles that have only a very short acquisition window with no base station guidance, no counter-counter-measure features, secondary UV target discrimination, etc. They're also trying to divert attention from big, relatively cool airliner turbofan engines. Even then, to really work well the airliner would have to maneuver violently to try to take its engine exhaust out of the missile seeker head's line of sight, which isn't something an airliner is great at on takeoff.
Even if MH17 had been equipped with chaff launchers and early launch detection systems (detecting targeting radar locks, missile seeker head radars, rocket motor flare detection, etc) and active radar jamming, and even if it had successfully detected the missile launch - would it have made any difference? It's possible it might've; I don't know enough to judge. But ... if we'd been putting countermeasures in planes for the last 10 years, wouldn't we have already lost a plane or two to the countermeasures first?
I'd be way happier flying in a jet without pyrotechnic countermeasures, even (high) over a conflict zone. Of course I'd rather not be over a conflict zone at all.
I really hope this incident doesn't land up saddling aircraft with "safety" equipment that's more dangerous than the threat it supposedly protects against.