Apple didn't make the decision for you. You bought a device knowing it doesn't have that feature and likely never will.
Lot of us did not, I did but lot of people did not, it took a long time for Steve Jobs to publish his historical rant on Apple.com and even after that, Apple reached the masses, the masses do not even know about Flash or barely know who Steve Jobs is, if not by name. Most people figured it out by seeing things being broken, now Apple instead does not show anything at all so it looks like you are not missing anything... Grab an Android and compare, there are videos out there showing comparative of some websites in PlayBook and iPad, the HTMl5 alternative of some Flash websites is insulting on a $400 to $800 device.
(1) Flash is not great tech, even if it is popular
Flash is very vague, there are 10 major versions of the Flash Player, 4 major versions of the Flex SDK and 2 major versions of the Adobe Integrated Runtime (AIR) and a full ecosystem of both open source and proprietary technologies and tools. I do believe Flash 10.2+, Flex 4.5 and AIR 2.5 on PC, Mac, Linux, smartphone, tablet and connected TVs are awesome technologies ahead of competition in many respects. Also, most people think Flash as video but it is way more than that and it is the dominant technology for applications across all platform and screens, there is a reason why Apple is afraid of it and keeps a smoke screen around it.
Pardon me for splitting hairs but selling a tool to facilitate conversion of Flash to HTML5 certainly is "getting in on the act."
First of all it is an experiment not a tool, secondly it is a brilliant initiative from Adobe to help the advertising industry convert all theirs Flash ads to HTML5, when all ads will be HTML5 that argument that Flash is just ads will disappear and the real nature of Flash will be able to shine. Most applications that trully leverage Flash Platform can't be converted to HTML5 as certain as 1 + 1 can't add up to 3. It is also not Adobe walking away from Flash, the whole industry is actually betting on it and baking it in.
(2) If they include the option, it will either be off by default or people will leave it on and not bother to change it, because they don't understand it. This will affect negatively many people's experience of using the iPad.
I do not think so, nothing would refrain Apple to have a "touch to start" for Flash. If you don't touch it does not start, a monkey could figure it out. Update: sorry I thought you meant people will leave it on regardless, my bad. I take the "I don't think so" back.
(3) To implement an easy solution (Flash content has a button: do you want to see this content?) is not really that easy a solution
Can you explain why it is not really that easy a solution?
It's not mp4, it's HTML5, and plenty of developers have been doing just that.
Neither MP4, nor HTML5, nor H.264 or anything that Apple supports or allows in the browser on iOS can come even close to compete a set of rock solid enterprise class technologies such as the Flash Platform. Also, nothing matches the Flash development community, there are 3 million of us, there are maybe 100 or 200k iOS developers and this is going to even shift more as Flash spread and Apple is isolating itself. We deploy Flash app everywhere at once, you only deploy iOS apps on iOS so it's a no brainer, you think businesses want to build apps for Apple or for the world?
We need to move forward, it might be painful for some (not for me). If we keep adding flash, then it will just become a permanent crutch and we'll never get beyond that. It's like a physical rehab patient. It's easier to keep using a walker and it does what you need it to do, it allows you to crawl, albeit not really good. Eventually you have to put the walker aside so that you can learn to run.
You should google Flash Platform, Flex 4.5, Flash Media Interactive Server, AIR 2.5… There is nothing in this world that matches Adobe's offering when it gets to Rich Internet Applications, which applications also work almost as it on any desktop and most new smaortphone, tablets and some smart TVs. Also, 8 out of 9 of world's largest device manufacturers committed to Flash through Open Screen Project and this is what the industry's CEOs have to say about Flash:
http://www.youtube.com/watch?v=_CwI227m-hs
With all due respect, I think you have an outdated vision of Flash.
Apple. Can every single developer of flash websites (millions upon millions) convert their content to mp4?
Your question is the same as asking if you can convert all websites in video… of course not, a website is not a video and a Flash website is a complex application that it is impossible to produce on iOS devices without ejecting user out of the browser into Apple's control with a 30% tax.
Do you think you should blame Gizmodo for their web design or Apple for not having Flash?
Apple has to support the web, they decided to not and as Android spread consumers will become conscious of that.
Flash is old news. Flash is a security risk. Flash is buggy.
Flash is not nearly as old as Quicktime. Flash is not as much a security risk as Apple giving away your phone ID to who ever make a proprietary app. Flash is not nearly as buggy as iTunes on 90% of world's computer also known as PCs.