Before you jump on the "Apple hates developers" bandwagon like everyone else, you might want to look at the decision from Apple's point of view. This move is less about developers, and more about the end user experience. Developers (at least those with decent product ideas) will go where there's money, period. Apple's not worried about offending those too lazy to learn how to use their supplied developer tools.
Things Adobe should understand…
- Apple is trying to supplant Flash with HTML5. Letting Flash author iPhone apps would be another reason for people to keep buying into that platform.
- Apple doesn't want to rely on third party products for critical pieces of their ecosystem, and they sure as hell aren't going to risk letting one become a popular rival to their own SDK. The fact that Xcode is not available on Windows makes that scenario a real possibility.
- Apple needs applications to be as lean as possible now that they are adding multitasking. Flash is notorious for excessive CPU and battery strain. (Here's an insightful blog post on the subject from a Flash developer. Needless to say, he is less than thrilled with the result of his ports.) Flash devs with little to no experience with a "real" programming language would likely exacerbate this problem. Resource management and optimization is critical when developing for mobile devices.
- Apple also wants applications built with their specific devices in mind. Adobe's focus as of late has been "build once …deploy to multiple targets." If you've ever run an AIR app you've seen the outcome of such a process. The apps run, but they don't have a native look or feel and they often use much more memory than they should. Now, imagine Flash being able to output both an iPhone AND an Android app simultaneously—this would be great for Adobe (and Google), not so much for Apple.
- How many more reasons does Apple need?
It was a dumb move by Adobe, and they better get their heads back in the game and start working HTML5 export tools for CS6. If they keep peddling Flash, that part of their revenue might go down with the ship.