The real reason Apple won't allow Flash on the iPhone/iPod/iPad isn't because it's buggy or because it's technically difficult. It's the same reason Apple doesn't put a standard USB port or expandable memory on it's devices - it's all about Apple Lock-In.
Flash is a huge threat to the App Store because with it you can play games, run apps and even build an "app store" that competes with Apple's.
The same goes for USB, Apple doesn't want you connecting a flash drive to your iPhone/iPod/iPad because they want you to get your content from iTunes, not to simply copy or play it from an external drive.
That's why Apple uses an expensive proprietary 30-pin "dock connector" instead of USB. They get to sell expensive cables (there's no OTA syncing of content, natch) and they get to license the connectors to legions of third parties clamoring to make peripherals for the device. More importantly though, Apple wants to sell millions of $69 keyboard docks and maintain control over what is passed across the dock connector port.
The same goes for expandable memory...
Hoping for a Bluetooth keyboard for your iPad? Don't hold your breath. The iPad will not likely work with a Bluetooth keyboard if it's anything like the iPhone and iPod before it. Of the 28 or so Bluetooth profiles in existence, Apple only supports the five least threatening profiles on the iPhone and iPod touch -- and the keyboard profile (HID and/or SPP) isn't one of them.
Update: Phil Schiller told PC World's Tim Bajarin that the iPad "works with a Bluetooth keyboard." This would be a complete departure from the iPhone and iPod touch which don't include the Bluetooth keyboard profile. But Great News if true. Will the BT keyboard support make it to the iPhone and iPod touch then to?
Blocking the HID and SPP Bluetooth profiles prevents transferring files to/from your iPhone/iPod/iPad and effectively eliminates tethering over Bluetooth too. [This remains to be seen. -Ed]
This is the same reason that Apple doesn't include an accessible file system on the iPhone/iPod/iPad. Apple doesn't want you to store any content on your device that didn't come from iTunes.
This is the same reason why Apple doesn't include an expandable memory slot on its devices. Transferring your own music, movies and videos directly to any Apple device is a no-no.
Apple wants you to purchase (or rent) all of your content via iTunes and anything that threatens that model is a threat to its business. I realize that Apple has an obligation to create profit for its stockholders but let's just drop the Flash is buggy charade and call a spade a spade. Apple will probably never implement Flash, USB, expandable memory or Bluetooth transfer profiles in the iPhone/iPod/iPad because its a threat to its profit and control.
If you want this type of technology don't complain, buy something else.