Your definition of flagship is different than the English definition that I am used to. Unless you are using the word to mean premium or profitable. According to Merriam Webster, the definition for flagship is 'the finest, largest, or most important one of a SERIES'. There is no series with Apple and iPhones, it's one phone.
Most people associate iPhone to be premium because of the price, there is no competition for iPhone with the same OS, so no real comparison on price. One point of view is that because it sells in vast quantities, it cannot be expensive to sell that many. So price reason cannot be used to mean 'flagship'.