So, there are two sides here. Adobe's: "The primary goal of Flash has always been to enable cross-browser, platform and device development," Mike Chambers, principal product manager for Flash developer relations, wrote on his blog. "This is the exact opposite of what Apple wants. They want to tie developers down to their platform, and restrict their options to make it difficult for developers to target other platforms."
As such, Chambers said that Adobe does not plan to further invest in the Packager for iPhone plugin, which also covers the iPad.
"To be clear," Chambers continued, "during the entire development cycle of Flash CS5, the feature complied with Apple's licensing terms. However, as developers for the iPhone have learned, if you want to develop for the iPhone you have to be prepared for Apple to reject or restrict your development at anytime, and for seemingly any reason."
Apple has been absolutely ruthless about Flash, refusing to support it on the iPhone or iPad. (Hell, I'm surprised I can watch Hulu on the MacBook Pro I'm using right now.) Apple has shown it won't bend to the Internet, so will the Internet bend to Apple? The company's heavy support of HTML5 as an emerging standard shows that it's betting it will.