What Apple needs to do is help content creators convert or create iPhone friendly browsing experiences. A major iPhone/iPad limitation is not enabling iTunes purchases from popular sites like blip.fm as jumping points while broadcasting (DJ-style) song lists, in addition to listening and sampling music from other DJs. I love my iPhone and my blip.fm and want them to inter-operate. I am sure there are a lot of other similar frustrating user experiences. I agree with Navelpluis that an open-source equivalent would be handy to possibly solve this issue.
Well, I'm not crazy about Apple's approach. However, their shareholders probably agree with the approach. That being said, most flash based applications that I have run tend to be pretty stodgy. I'm not sure if it's flash's problem though... No talk of Windows mobile!?
Let me list some 'hidden features' of Adobe Flash:
* Memory leaks
* Security issues: Apple cannot secure Flash
* It needs too much processing power
* System slowdown, small footprint devices can never support flash properly.
Flash is of no use to noone: I hope someone will make an open source version for flash functionality (if you really want it or need it...)