Well, duh. In a Bloomberg Television interview from the World Economic Forum in Davos, Switzerland, Adobe CEO Shantanu Narayen admitted that developing Flash for the iPhone was "hard." Specifically, he said
"It's a hard technical challenge, and that's part of the reason Apple and Adobe are collaborating. The ball is in our court. The onus is on us to deliver."
Part of the issue is getting Flash, which is used to view online video and animation, to work effectively on the iPhone, or at least to the satisfaction of Apple CEO Steve Jobs. While 800 million other handsets have Flash, the iPhone does not, and it's because Jobs feels it does not run well enough on the iPhone.
Nothing can make it to the iPhone through the App Store without being approved by Apple, though it's possible to install unapproved apps on a jailbroken iPhone.
Flash Lite, Adobe's phone-focused version, isn't good enough for the iPhone, Jobs added; what Jobs wants is a version between Flash Lite and the full-featured PC version.
We will admit, it would be truly annoying if the first version of Flash that appears is a full-featured version for the upcoming iPhone 2,1 that we've seen references to lately. That phone will probably have a more powerful processor and better graphics support, meaning it's possible full, PC-level Flash might be possible on the device.