Addicting Games converting Flash titles to iPhone
Seeing as no one's converting Flash to iPhone
At this point it seems safe to say that Flash could work on the iPhone, but Apple doesn't want it to. It's vaguely understandable that it could be a conflict of interests if the iPhone was playing browser games that are very similar to the ones Apple is selling on the App Store, but as customers we feel it's our right to demand it anyway.
In lieu of a working Adobe Flash system for the iPhone, the prolific gaming website Addicting Games is putting its developers to work converting the more popular games to sell on the App Store.
Apparently it's working closely with these Flash developers to help them cross the boundary into iPastures new, and considering the wealth of games currently available on the site this could make for a treasure trove of awesome should the indie web game designers take Addicting Games up on its offer.