Apple did decide to not support it, but they didn't decide not to support a thriving product - it's like 3 1/4 floppy disks, when the iMac decided not to include a 3 1/4 drive people grumbled but it was mostly dead tech, writable CDs had become wide spread enough to obsolete it - with flash, when Apple decided to drop support, they did so in an era where preferred alternatives already existed and the tech was thoroughly reviled - so Apple put the final nail in the coffin, but flash was already in the ground at that point.
> when the iMac decided not to include a 3 1/4 drive people grumbled but it was mostly dead tech, writable CDs had become wide spread enough to obsolete it
The G3 iMac did not include a CD writer, so if you wanted to use writable CD to get data out of your iMac, you needed to buy an external drive.
You aren't quite right on writable CD being wide spread then--you are early by at least a year or two. When the G3 iMac came out CD-R drives were still above $300, and CD-RW drives were above $450. CD-R discs were around $2 a disc, and CD-RW discs were more like $15-20 a disc. (I'm getting prices from the November 1998 issue of MacWorld).
My recollection is that the usual ways people dealt with the lack of floppy were:
1. External floppy drive.
2. Iomega Zip drive. An external Zip drive suitable for use with the G3 iMac was about $120 when that iMac came out.
3. Ethernet to exchange files with another computer on the LAN that does have a floppy.
That's not correct. Flash usage was trending down fairly rapidly even before that as javascript, css, html5, canvas, and DOM became more feature filled.