From your comment, you seem very much like a basement coder. In the real world, about the only place where performance still matters to the point of using low-level languages with no garbage collection or automatic memory management is high performance 3D games.
Heck, most Web and smaller 2D games on things like the iPhone are written with abstraction layers and they run just fine.
More than anything, your failure to realise this shows me you have absolutely 0 experience in the field of software beyond either your code monkey job at EA or your basement.
I see, so real world == web.
Local 2 year college of web design? You are correct, I don't do trivial web stuff, that is what students are for.
I have been doing telecommunications development since the 90s. Real time networking/call processing where c/c++ performance is critical, Just as it is for any activity extracting the most performance.
Yes you can do cheesy flash games, or equivalent without using the best tools.
But if you go to any major gaming house, C++ will be the language of choice.
So Top Game Development, telecommunications, Operating Systems, any real time programming will be done C/C++ (Obj-C for Apple). Calling c,c++,Obj-C backward languages is asinine. They offer some challenge, but the reward is worth it. They are an excellent choice if you want to maximize the envelope on a resource constrained system (like a phone).
VMs/RTEs are fine if you don't care about your memory footprint or performance. So you can do little cheesy 2-D games, but leading edge games that stand out will be coded in high performance languages(C/C++/Obj-C) to take full advantage of the hardware.
Also you seem to keep making the assumption I am against libraries/toolsets/frameworks that speed development. I am not. These are a fact of life even in telecommunications development.
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Back to this issue of increased development lock down.
From my perspective, tools that aid development and even many game engines won't be blocked.
This is all about the platform fight, and Flash-to-App is the primary target.
Flash is not a tool/aid/framework for iPhone, it is a separate platform competing against iPhone, trying to ride on top of and supplant the iPhone platform. Therefore it makes complete sense from the Apple perspective, to block it, because it is only detrimental to the iPhone platform.
As stated before, I wouldn't be surprised if MS did the same for WP7 and it's new Appstore, for similar reasons. That is if Adobe ever got around to targeting them.