Apple has been getting so much criticism over the iPhone and especially iPad not supporting flash that Steve Jobs wrote up a long explanation that is on Apple's site entitled
Thoughts on Flash
Steve starts out by saying:
Apple has a long relationship with Adobe. In fact, we met Adobe’s founders when they were in their proverbial garage]. Apple was their first big customer, adopting their Postscript language for our new Laserwriter printer. Apple invested in Adobe and owned around 20% of the company for many years. The two companies worked closely together to pioneer
Jobs goes on to make 6 main points:
That flash isnt open (Didn't expect to hear that from Apple's CEO)
Most videos are available in H.264
Reliability, security and performance.
Doesn't work well with touch
Battery life
and concludes with his final reason:
Besides the fact that Flash is closed and proprietary, has major technical drawbacks, and doesn’t support touch based devices, there is an even more important reason we do not allow Flash on iPhones, iPods and iPads. We have discussed the downsides of using Flash to play video and interactive content from websites, but Adobe also wants developers to adopt Flash to create apps that run on our mobile devices.
We know from painful experience that letting a third party layer of software come between the platform and the developer ultimately results in sub-standard apps