Definitely make time to read Steve Jobs's blog post from yesterday, "Thoughts on Flash" - no doubt you'll conclude as I did that there's no turning back in this battle. Over the past few weeks the war of words between Adobe and Apple over the latter's lack of Flash support in iPhones, iPods and iPads has flared to new levels. Now Jobs's new post kicks things up another notch. Jobs's argument is mostly a technical/product one - "open" vs. "closed" systems, reliability, performance, security, battery life, touch attributes, etc. (Adobe posted a short response here)
But Jobs's last point is clearly the most important, as he acknowledges. Apple wants to control its own destiny to provide the best products possible and doing so requires eliminating any dependency on 3rd party tools. Lack of dependency on others is a hallmark of Apple's model more generally, but when it comes to the Flash war, the number of penalties Apple is imposing due to its uncompromising position is pretty remarkable: users' inability to view video at some of the web's most popular sites like Hulu, forcing these sites to offer their video in HTML5, marginalizing smaller content providers that don't have the resources to make the change, etc.
However, Apple's products are loved and only Jobs would have the single-mindedness and guts to force a pretty wrenching change in the video ecosystem. Until we see Android or other smartphones emerge as a counter-weight to the iPhone's hegemony, Adobe's role in video is bound to wane.