Don't worry, i'm not defending Adobe's stance and indeed many ways that you interact with flash are crippled using a touch screen, I'd like to see the Droid run
this site properly for instance!
In regard to that, Adobe have to re-invent the tool sets and events that trigger the equivalent of a mouse click properly (for instance, dragging your finger acts as a roll over and double tap acts as a mouse click) or just let developers continue to make flash content that is broken using a touch interface.
As much as Adobe like to say they want to create content that can be delivered on multiple platforms, from phone to computer ... they still insist that you need to "optimise" for low power and touch screens. i.e. Some poor developer is still going to have to make a mobile and desktop site and be clever enough to do it elegantly. And it's a testing nightmare.
I guess there is a two-fold problem of
a) delivering flash on touch platforms and of
b)delivering flash on low power platforms.
Just for the time being, they two go hand-in-hand.
Once Adobe fix both of these, Apple might relent on their stance.