iPhone owners were anticipating a release of Flash Player for the iPhone since it was first introduced a few years ago. Nowadays the highest portion of internet websites have Flash included in some form but with this news iPhone owners won't be satisfied for sure.
According to a lot of sites Adobe Flash Player won't make to the iPhone because it simply voids Apple iPhone SDK (Software Development Kit) Terms of Service agreement...
"An Application may not itself install or launch other executable code by any means, including without limitation through the use of a plug-in architecture, calling other frameworks, other APIs or otherwise"
"No interpreted code may be downloaded and used in an Application except for code that is interpreted and run by Apple's Published APIs and built-in interpreter(s)."
Apple loves to be in control of their products and allowing Flash, or even Java for that matter, will crack Apple's dominance on the App market by making the iPhone capable of running outsourced Apps hence they won't allow it.
Adobe has also shown reluctance about Flash for iPhone. They said trimming up Flash for the iPhone to reproduce "Flash Lite" version simply won't cut it and it will lack a lot of features. It's all up to Apple in the end.