I don't think Adobe is interested anymore, and is sick of trying to put up with Apple's shenanigans in regards to their plugin.
But yes, I agree, Flash runs like crap on OS X. But runs beautifully on Windows.
Apple's shenanigans in regard to their plugin? What, exactly, has Apple been doing to muck with their plugin on OS X? Please tell me your example isn't going to be releasing 10.6 without the very latest Flash plugin...
Advertisers don't need Flash technology to make annoying multimedia ads that can screw up one's browsing experience. You should know that by now.
Yes, but they
do need Flash on a client to display Flash advertisements to that client.
Love or hate flash (and it seems most people on this site hate flash

) I feel that if we really want the iphone to grow as a platform we need to have alternate methods of writing software for it.
Why? The iPhone
is growing as a platform, and remarkably well. It supports a powerful development environment capable of games which can be every bit as fun and beautiful as what we see on the DS or the PSP (while most any other type of program is obviously possible). Development firm interest in creating titles of this sort is gradually growing. Supporting an alternative programming environment on the high-end is pretty silly without access to APIs, and on the low-end what would you be arguing for that isn't already available?
I don't think there's anything wrong with Flash gaining the ability to export Flash applications to the iPhone format. It could allow some pretty fun pick-up-and-go games to see the platform. It will likely be limited, though, in terms of developer control. I just don't think events like this are particularly relevant to the iPhone's progression.
My takeaway from this news is just that the iPhone is lucrative enough that Adobe is still offering features for the platform despite apparently having their nose rubbed in the dirt over the plugin itself.
It seems like your basic point was, though, that this isn't a big deal. On that count I agree with you. This isn't bad news at all.
You will see a massive increase in both quality games and quality apps (and bad ones) for the iPhone if CS5 lets you publish to the iPhone OS.
From what I understand, it will be just like publishing a Mac or PC stand alone in flash. You pick a checkbox for the platforms you want in the publish settings, and click publish. Two seconds of work to publish on 3 platforms simultaneously.
I don't think we'll see a 'massive increase' in quality games and quality apps. I think the biggest obstacle is going to be that the export will be concerned with porting the native Flash-like capabilities to the iPhone. That means no, or very limited, iPhone specific features. It is probably going to be a pain to integrate these exported Apps with these features. There's a good chance that these Apps won't feel Mac-like (or iPhone-like), as well.
This will be great for opening the doors for Flash game developers to release content on the iPhone (as long as Adobe does a decent job) but I'll be surprised if we more than a handful of 'quality apps' as a result of this.