Its useful for small things but ultimately develops only at the speed of the behemoth behind it, discourages programmers grasping advanced principles and caters to the lowest denominator.
According to Mike Chambers...
There are no “Flash Applets” being deployed to the iPhone. Flash CS5 compiled SWFs into native iPhone applications. As far as other precedents and technologies, that is easy. There are quite a few technologies which allow developers to use other languages and development tools to create iPhone applications, including Unity, MonoTouch, Titanium, iPhone Wax and many more. Furthermore, content created with those toolchains have been frequently featured by Apple on the app store (as have a number of apps created with Flash CS5).
However he denied disclosing the conversation between Apple and Adobe as they would be quite humiliating :p.
Looks like era of flash is going to be over.... Welcome HTML5