I have always been under the impression that the primary sticking point with Apple with regards to Flash is that it would allow the implementation of everything in the App Store without involving Apple.
On the other hand Flash wasn't welcome on the iPhone when Apple didn't want native Apps made by third parties running on it... the App Store was an afterthought, leaving Flash on the side of the road clearly was not.
Or maybe the App Store was just a very well kept secret...
Or maybe the App Store was just a very well kept secret...