Great point. But having flash on iphone would cripple its already weak battery life. Flash can be pretty resource heavy.
Having MMS doesn't hurt Apple.
Having cut and paste doesn't hurt Apple.
Having, well, ANY of that stuff doesn't hurt Apple.
Letting flash on the iPhone would hurt Apple's app-store, and it would hurt the control they have over the iPhone and how it can be upgraded in the future.
They're not going to put themselves in that position.