Plus, Adobe does have a history of bloated, unstable, awkwardly implemented applications -- I know from decades of personal experience fighting with its installers, license management tool, long load times, and partially implemented features in tools that I depend on to do much of my work -- so Apple's "prove it to me first" attitude is more than justified. Adobe does some great work, but it's put out some awful wares, too.
InfoWorld has advocated that Adobe fix Flash so that it won't suck up all the iPhone's resources and won't constantly crash the device. However, it appears Adobe is not interested in delivering a verrsion of Flash that would work well on the iPhone, just on using public pressure to try to force its way in.
The fallacy of the "Web future" argument
In its campaign, Adobe is ambiguous about the distinction between OS-level apps and Web apps. Apple has been clear that it sees a difference and will treat them differently. Adobe's fudging of this point has an obvious reason: While it would like to have Flash apps run natively on the iPhone (thus its Flash-to-iPhone converter in Flash Pro CS5), it needs Flash video and apps to run in the iPhone browser, because that's where Flash is most used. If content developers figure out how not to need Flash on the iPhone, it'll be easy to conclude they don't need it on other devices or even the desktop, either.
Thus, the "future of the Web is in jeopardy" claim from Adobe's cofounders. But it's a lie.
The truth is plain and simple: Adobe is trying to position Flash as a Web standard, but it's not one.
The fact that other mobile platforms are allowing Flash video and apps in their browsers is besides the point. Apple has decided -- rightfully, in my opinion -- that Flash is a big bag of hurt that users will quickly discover they can live without. Apple has repeatedly said Flash is too unstable and resource-intensive to allow on the iPhone. Flash certainly has those issues on the desktop, and Adobe has yet to deliver a full Flash player for any mobile platform, so I believe Apple's concerns here.