Its not just Flash according to the developer agreement. Basically it needs to be coded in Objective-C -- no other language is allowed (Flash or otherwise). For Adobe's platform to be allowed it must be an Objective-C Integrated Development Environment targeted at Magazines. It probably has a set of libraries to link to that provide Adobe value-added functionality.
Only problem I have is that with every such magazine you are probably getting ALL the libraries all over again. Hence, Wired magazine was 500MB. To put that in perspective, it is about the same footprint of IBM WebSphere Application Server which includes a complete J2EE platform, tons of client-side libraries for building client apps in the "application client", an HTTP server, and an embedded Derby database.
I can't imagine why Wired Magazine is so darn huge if not for carrying around the entire Adobe platform as luggage.
UPDATE:
So I was wrong regarding the Adobe libraries being the culprit of the huge size. Rather it is the output format the Adobe tools use. As discussed in
this link above. Apparently every page is made up of tons of images and some duplicated for landscape and portrait mode.
Keep in mind that after downloading the tons of free iBooks from the complete works of Mark Twain and tons of Williams Shakespeare, Lewis Carroll, Jane Austin, etc.... I was concerned about what kind of space would be required by so many of the classics on my iPad. The answer was 95mb. Considering a single issue of Wired takes 500mb it is really really hard to justify using up that much of my storage space.