Quoted from: http://labs.adobe.com/technologies/flashplayer10/#fp10demo

“Adobe needs full support from Apple beyond what is available through the SDK to enable Web browsing of Flash-based content on the iPhone. While we have been working hard to make the browser plug-in available, without increased co-operation from Apple, it will not be possible. Adobe is therefore focusing our development work on the major smartphone platforms that are working with us to deliver the most innovative and complete web browsing experience. With more than 85 percent of the top 100 websites using Flash and approximately 75% of all videos on the Web using Flash, we still believe that Flash on the iPhone would greatly benefit the millions of joint Apple and Adobe customers.”