Flash kills batteries dead
Although there is some political wrangling and corporate pissing-matches going on here, I think the lack of Flash on the iPhone and iPad is mostly due to the fact that Flash is so CPU-intensive, it kills battery life:
"The [Flash] prototype allowed the iPhone to have less than half an hour of battery life using flash."
A version of Flash that uses the GPU might be easier on the battery, but that would require actual effort on Adobe's part.
Not that I have any need for an iPad at the moment (I had hoped for a full-fledged Tablet PC that could run OS X and Photoshop, but I'll just have to limp along with my XP tablet for a bit longer).