You wouldn't need apples seal of approval though, would you?
All you'd need is a web page with the flash app embedded in it.
I really wonder how much of apples anti-flash stance is due to the fact that it would allow instant bypass of the app store and another way to get apps on the iphone.
The whole battery life and user experience argument is nonsense, if a user wants or needs something they should simply get it.
The problem is that the vast majority of users are not capable of understanding that there is a trade-off of performance/battery-life when using Flash applications. For you, me, and pretty much everyone else on HN, this is fairly evident, and so it can seem frustrating that Apple doesn't allow Flash on their devices. But most people don't understand why these tradeoffs exist, they just have a phone whose battery mysteriously drains ridiculously fast, and sometimes web pages just become very slow to scroll.
Apple have made a choice - if they can't make these tradeoffs transparent to the user, then they won't allow the tradeoff to be made. I think that a vast majority of the population would agree with that as an idea, they don't want to have to deal with the complexity of modern gadgets, they just want them to work. If you're a user that figures that they can handle this complexity without shooting off your foot, then you're really not Apple's target market.
Of course, I can't help noting that you can always just jailbreak an iPhone, or get a dev certificate, and you can modify things to your heart's content - it is only "power users" - those comfortable with technology, but not good enough to be able to modify things themselves that find the iPhone platform frustrating...
I fear that by life difficult for power users, Apple (and any vendor who follows their path) will reduce the number of power users that evolve every year--and we need power users as seeds for growing developers.
A creative developer doesn't start off with developer-grade skills, he starts off as a child(newbie), learns to walk(normal user), learns to run (leg power user), then figures out how to attach rockets to his legs without killing himself.
I think you've misunderstood what's happening (though it's also possible I've misunderstood your post, in which case sorry).
Unless it's HTML/JS/CSS, there is no way of embedding an app, Flash based or otherwise, in a web page on the iPhone. iPhone Apps are standalone and interact very minimally with each other. Safari on iOS certainly has no way of accomodating something akin to a Flash plugin.
What Apple have OK-ed is using tools other that XCode to produce standalone apps and one of the tools this now allows is Adobe's Flash to iPhone app builder which, very roughly speaking, takes the source of a Flash application and creates an iPhone app with the same functionality.
But the apps it produces are not Flash, they're standalone native iPhone apps, they can't download or run Flash from the web, they sit outside the browser, they still have to go through the app store and are still subject to Apple's rules and restrictions.
In terms of restricting things to the App Store - Apple already allow a mechanism for going to the web and running apps that don't go through the App Store. It's called web standards - HTML/CSS/JS/H264 and so on - indeed for a while it was the only mechanism they supported.
The App Store contributes 1% of Apple's profits (high volume but the margin is pretty low as you've got to host, review and distribute every app, regardless of cost or sales). I honestly think this is about the experience rather than the money.
> You wouldn't need apples seal of approval though, would you?
Short answer: You still need to get apples seal of approval.
You will still have to use the AppStore to get that app on the iPhone. The only other route is a web-app.
You will still have to get Apples seal of approval to get on the AppStore. There is no alternative.
You will still have to adhere to the HIG (and more) to get Apples seal of approval. So no generic cross-platform apps, your app will have to behave like a proper iOS app in every way.
I think that in reality nothing has actually changed. The reason behind the original ban of 3d party cross-platform frameworks has not changed. It's just the way in which Apple defends against this risk that has changed.
All you'd need is a web page with the flash app embedded in it.
I really wonder how much of apples anti-flash stance is due to the fact that it would allow instant bypass of the app store and another way to get apps on the iphone.
The whole battery life and user experience argument is nonsense, if a user wants or needs something they should simply get it.