My argument on this particular thing is wouldn't it be better to let us buyers of Apple devices decide if we want to burn our batteries a little faster by installing and using the Flash player, rather than Apple making such decisions for us?
For some definitions of 'us', I agree with you completely. For you or I and probably most readers of this board, having the option would be great, even if it was just a case of having it installed but disabled except for emergencies (in a flashblock stylee).
But given the state of most computers that are not managed by an expert (crawling with malware, 5+ toolbars installed, desktop completely covered in icons, 35 items in system tray, etc) I believe for a mass-market device this would result in 95%+ having Flash installed and permanently active within a week of purchase - they won't 'decide', people will just click on whatever they are asked to by their favourite sites. If Almighty Steve really is right about Flash being iDeath to iDevices, then a lot of people would soon be complaining about how rubbish their expensive Apple gadget is and his Steveiness wouldn't want that.
In my opinion, most people can't be trusted to make sensible choices about their computing devices and the internet, they're just not nerdy enough. So the stance Apple have taken (lock it down/dumb it down, kiss the geek market goodbye and hope Average Consumer likes it) has some logic to it.
I have no idea if it will actually work, but I certainly hope so, because while an iPad isn't my cup of tea, I think the general form factor has a great deal of potential and if Apple can turn this into a mass market, then one of the niche players will probably cook up a variation that suits me. And a generic cheap knockoff (with a terrier-resistant cover) might suit my mum.