I wonder if the underlying reason Jobs will not allow Flash on the devices is emotional. Is there a reason for him to be bitter at Adobe? And the overwhelming vehemence of the fanboy crowd against Flash seems emotion-based as well.
BigRob66, you said a lot of things very well. I thought I would just comment on this one thing. I suspect it's purely financial (why Flash is blocked).
There are tens of thousands of games available for free and coded in Flash. You don't sell games very easily if all those iDevice users can get so many others for free.
There are rich applications coded in Flash to do all kinds of great things (particularly elearning interactive functionality). You don't sell lots of applications if an equivalent is readily available for free.
Apple wants to be in the iAd business. But Flash ads are already well established. Apple makes more money if iAds for mobile devices have to flow through Apple's control/coffers rather than running as they do as Flash ads.
Etc.
Flash is flash. It was fine by Apple for a very long time, then suddenly it was not fine. Coincidently, it became undesirable just about the time that Apple learned how much money it could make by taking a slice of App sales, and in the mobile advertising business.
Blu ray delivers the ultimate video picture as well as massive storage on thin discs. But Apple likes iTunes video download fees, so Blu Ray is "a bag of hurt" (even when the main reasoning for that statement has long since been resolved).
Amazon had the ebook market delivering books to consumers for $9.99- a flat fee model just like Apple's long-term model for delivering music. Amazon became "bad" when Apple decided to enter the ebook space, and we consumers "win" by getting to pay variable (translation mostly higher) prices for the same ebooks Amazon would have sold us for $9.99.
Many fans still see the Apple of old: the rebel fighting against the dictators, monopolists, etc that forced software on us, or forced changes upon us, etc because it was good for their businesses (at the expense of what was best for consumers). Now, Apple does things like this, and some fans are so Apple-centric that they appear to be unable to see that Apple is becoming the same kind of creature against which they were perceived to be rebelling. Our (consumers) reward is an "ultimate Internet device" without a major long-term-standard feature of the Internet, higher ebook prices, and having to deal with AT&T and only AT&T if we want to use an iDevice. Woo hoo!