You seem very sure of that. The idea here is that the Adobe programs would be IN the app-store, remember. Since they're cross-platform, what do you want to bet that many developers will use them?
I'm betting that most of the app store would BE Flash-made apps.
And considering there's already +200k apps on the App Store that aren't made using Adobe's tools, you'd lose that bet. Developers aren't going to drop their existing pipeline and codebase to switch over to Adobe... that would be pointless and expensive. Additionally, if Apple wants to ensure that there are apps that use whatever features they want to promote, they can either make those apps themselves or hire a developer to do it for them. This is, by the way, how Nintendo, Sony and Microsoft operate on their game platforms and why comparing game platforms to Apple is incorrect. Cross platform games are common; no platform owner tries to discourage this, instead they each make sure that they have games that are exclusive to promote both their libraries and their technical abilities.
Like I said, I don't think that'll happen. I think the 'free market' will never get a chance to choose. Right now I can choose between a phone without Flash (iPhone) or a phone with (eventual) Flash (Android.) I consider THAT to be the free market deciding.
I have a choice of which kind of phone to buy. Forcing Flash onto the iPhone means that I then must buy a phone with Flash. If I want one without it,
I would no longer have that choice.
Basically, we're arguing about 2 different kinds of choice:
1) I think giving consumers the choice over what kind of platform to buy is paramount.
2) You think that giving developers the choice over what kind of software to design with is paramount.
Those are contradictory goals in this case. Are you a software writer? Then it would make sense why you'd pick #2 over #1. Me? I'd rather give the freedom to the public than the software writers. Sorry, but I think the people spending the money have the greater rights. That sucks for the developers, I know, but SOMEONE has to win there. I choose consumers.
The solution to your first point here is fairly obvious: have an option to disable Flash. This is what Android will have: the current preview release of 2.2 with Flash 10.1 beta has an in-browser option to disable Flash. If you don't want it, you turn it off, done. This is similar to the requirements put on Microsoft in the EU but in reverse: give consumers all the available options (in Microsoft's case, browsers) and let them choose. No need to force anything on anyone.
As to consumers vs. developers... well that's all well and good, but it ignores one of the fundamental driving forces of any platform ever made, which is developers. Without developers a platform is
nothing (see: WebOS). The success of the iPhone hinges on the App Store, which is only a draw because of the developers that develop for it. Without them, there are no apps and one of the big reasons to chose the iPhone over any of its competitors is gone. And if Apple can keep some developers from making cross platform apps, then it means their competitors will have a smaller number of apps in their app stores, thus making Apple's platform more insisting to consumers. And that's the linchpin of the whole affair: by controlling the developers, they're robbing the free market the choice between platforms.
Basically it goes like this: lets say I start a small business to develop mobile apps. I don't have a lot of starting capital, certainly not enough to write and maintain multiple copies of my app. So I look at the market and see that I have two choices. I can either write a cross platform application using some 3rd party development platform (and there are many others besides Adobe here... Monotouch, Unity3D, etc) which can be easily ported to Android/WebOS/Maemo/etc but NOT the iPhone... or I can just code an iPhone version and skip all the others. In the consumer app store space, there are way more sales in the Apple store so my best choice to make a profit as soon as possible is to create just the iPhone version and ignore the rest. If my app sells well then great, in 6 months or a year I can now code a second version which can then be ported to whatever other platforms I want to deploy on.
The net effect? Small developers will target the iPhone first. There will be more new apps on the iPhone then on other platforms and the growth of other platforms will be hampered. Because of this, consumers looking to purchase a phone will see that there are more apps available for the iPhone and based on that make the best choice for them... go with the iPhone.
By unfairly restricting developers, consumers are intrinsically hurt. And by hampering the growth of their competitors, Apple has less incentive to innovate... which results in things like multitasking being a big deal now instead of two years ago.
So casting this as consumer freedom vs. developer freedom is wrong.
Developer freedom is consumer freedom.
And as it turns out... if you look at just the phone platform app sales (so, sales directly from developers to consumers), in 2009
99% of app sales were through Apple. If that doesn't demonstrate control over both the direct to consumer app market and over developers, I don't know what does!
And in the end, all Apple has to do is revert their developer license to what it was a few months ago, before the offending restrictions were added. It worked out great for nearly two years and resulted in plenty of quality apps developed with 3rd party libraries. If it ain't broke...