Actually, when subsidized, it can be cheaper. The iPhone 3GS 16GB for instance is cheaper than the BB Curve & Bold, Sony Ericsson X1 and the Nokia N95 here. Not that this is relevant but it could be easily argued that work should be done to accommodate those phones first since the customer paid more.
And bobtomay said what I was going to say about Flash. I have nothing nice to say about Flash. The excessive CPU usage it requires just to render a video would make your iPhone hot enough to cook an egg. Trust me, you don't want it on the iPhone. Plus, how much Flash content do you view in a day? Most Flash content people view is either YouTube (which is served through the YouTube app) or it's other Flash video which would be too small inside a browser window on the iPhone anyway. The majority of other Flash content is annoying ads with sounds.
On top of this, Apple has nothing to do with Flash. Apple can't force Adobe to make a Flash build for the iPhone. Considering the draconian rules Apple has about new programs for the iPhone, it would be near impossible for Flash to get on the phone. On a more technical level, I believe Apple's policy for acceptance onto the iPhone is that it can't execute or interpret code, which many Flash apps do through the use of Actionscript. I believe it is this policy that killed Java on the iPhone.