There's "open"
That's true - Flash is proprietary technology. But so is H264 - it's a patented codec. How is one proprietary stuff better than the other? Besides... Apple, who is avoiding any interoperability with other devices suddenly defends openness and standards? So disingenuous. I mean.. come on!
Apple says they created an open-source project called webkit, but hey, what's the history of the browser? First, it was forked from a different open-source engine called KHTML. Then, Apple didn't play very well with KHTML team, requiring developers to sign NDAs to view Apple's patches. What kind of "open" behavior is that?
Next point - the "full web" is not limited to videos. The fact that 40% of web's video is available in iPhone-viewable format doesn't mean that 40% of flash content is. It's just the video, nothing else.
50,000 games in the App Store are for Apple products only. Jobs would HATE to see a hit game running on Android, so it's natural he would say Flash games are not necessary.
Reliability, security, performance.
There are quite a few videos on YouTube showing off Flash on Nexus One and there are no performance issues whatsoever. Flash is still on track to come out with Android 2.2 by the end of June, so Jobs is not right about the "second half of 2010".
This video shows that playing flash video on Nexus One is not really a battery hog. And that's still NON-optimized. Final release will sure have much better battery performance. I'll Agree with Steve that security and stability is definitely something that has to be taken care of, but Adobe now has more motivation than EVER to do so.
And the touch..
I've seen videos showing off Flash UI utlizing touch screens. Swipes work perfectly, everything was smooth and fast. Check out New York Times flash app in this video. Also, Adobe AIR running on both Android and iPhone takes advantage of tilt sensor, so yes, we can use advanced mobile phone features.
Also I remember watching a video with mobile Flash app built specifically for touch devices. It was pretty awesome.
And the "most important reason" is basically saying that Apple doesn't really like competition.
I'm definitely not a Flash fan myself, but I hate Apple's hypocrisy even more. I'm a MacBook user and I'd never go back to Windows (maybe Ubuntu, but it's still not quite there), but what Apple does recently repulses me.
The reality
Now to the point - why, I think, Apple hates Flash so much? Let's see what would happen if Flash went mobile:
- A lot of great games would be available not only on iStuff, but also on other platforms. AppStore is one of the biggest reason to have an iPhone - Apple would lose the "available on iPhone only" benefit.
- Apple wouldn't be able to control what software is available on iPhone anymore. Right now they can take ANY app they want off the AppStore, just because they feel like it - and they certainly use that a lot. Having Flash games and apps is like having 3rd party AppStore on iPhone - that's a nightmare for Apple.
- Apple wouldn't have any royalties on Flash games. I can see Kongregate-like site for mobile devices popping up VERY soon and Apple would have no right to influence or monetize it in any way. Again, very scary for Apple.
- Apple wouldn't be able to block adult content on iPhone. Steve Jobs keeps criticizing Android for having adult content available (and what's stopping you from browsing adult content with iPhone's web browser?) and well, not having control over apps anymore would hurt his morality without any doubt.
Conclusions
Apple is scared of Android. And they certainly have a reason for that. They want to retain control of what's available on the iPhone and they definitely don't want to make it easier for developers to create cross-platform games. iPhone still dominates the market and if developers have to choose which platform to develop for first, they'll choose iPhone. If there was a way to create cross-platform games and have all major platforms supported at launch, iPhone would lose the "iPhone had it first" argument.
Sorry, I just can't believe Apple advocates HTML5 for the "right" reasons. It's just not their thing.