I don't think it is a case of Adobe not making a version of flash that is acceptable to Apple, I think it is a case of Apple not wanting a bunch of free flash apps taking their money.
But you are right, new technologies are coming that might make flash a lot less relevant.
Well flash video is already h.264 based, so that becomes a non-issue. I don't think Apple necessarily wants to stop flash games from making their way to the platform -- if anything, it further helps sell their platform.
For people like me, who make native iPhone apps it's a scary proposition because it opens up the platform to everyone so I actually like the fact that it doesn't support flash.
Regardless, Adobe's new version of flash will automatically generate iPhone native binaries so that barrier will be gone pretty soon too.
In terms of the iPad itself, I hate the name and I'm annoyed that it doesn't have GPS or camera on the higher end models, but I do understand that their margins are razor thin on these initial units and they had a very aggressive price point that they needed to hit. I'm sure rev2 will have a camera.
Personally, I think it will sell pretty well because it really dumbs down the computer experience which is what most people want. Something that does the basics (browsing, email, photos, casual games, books, movies, and simple applications), does it well and in an intuitive manner, and doesn't feel like a computer (with all its associated headaches). For most casual non-tech savvy users that's more than enough. Even for people like me who live on our laptops, I find myself often grabbing my iPhone to quickly look up something on the net or check my email because it's more convenient than pulling out the laptop. This device may have the same convenience appeal, even though it can't fit in your pocket.
I also see this as a great little gadget for those who take public transit into work or travel a lot, and need/want a persistent internet connection. I don't think Apple got it 100% on their first try, but I think a lot of the "ease of use" is there, and the integration with their mini/micro-transactions on the iTunes store is where the future is at.