Apple could simply require that any iPhone application in normal use must not use more than so many mW of power. Easy to verify, and if Adobe's Flash doesn't meet the requirement, back to the drawing board it goes.
As it stands, Flash is banned regardless of how optimized it is. I'm sure if Adobe releases an app called "Flash" that does nothing and exits immediately it would be still banned, just on the basis of its name. On the other hand, if I put together a Tetris game that has twenty infinite loops in twenty threads (do they have threads?) and burns power like crazy, that would be just peachy with Apple.
If you haven't had a freeze and had to restart a smartphone, you are one lucky individual.
I restart my PDA maybe twice per year, and not because it locks up (it never does) but because its Bluetooth stack has a known licensing bug. There is a fix from Dell, but I never bothered to apply it. My phone (LG CU515) never locks up.
Look through iPhone threads and start counting how many people say they are getting one the day it is on Verizon.
It may be that Apple shot itself in the foot when they signed the exclusive deal with AT&T, I think it will expire only in 2012. Android will have plenty of chances to prove itself. Many people use Verizon because of its superior coverage. In several [rural] locations AT&T phone had no coverage, but Verizon phones worked fine.
Flash is banned because it will not work on touch screen technology which does not use a mouse pointer. Flash works by detecting MOUSE OVER and KEYBOARD inputs... something the touch screen iPhones and iPads singularly lack. Those attributes are built into FLASH at a very basic level and require rebuilding Flash from the bottom to the top. Adobe is doing that... but even if they do, how many of the hundreds of thousands of the existing Flash apps on the WWW are going to be rewritten to drop the Mouse Over and hovering requirements that pop-up menus or take actions? There will be a minority of new Flash apps that will work and a vast majority of legacy Flash apps that will not work with touch screen mobile devices... not a good solution... for years to come. There is a very good the reason that Flash is not allowed: IT DOESN'T WORK ON DEVICES WITHOUT MOUSE POINTERS!
Even the Vice President of Google admitted at a Google developer's conference the other day that it's Android OS phones were not producing the battery longevity they were promising because of Apps over drawing power... especially when multitasking... and that attempts to utilize the new Flash for mobile was one of the worst offenders.