Flash is sufficiently ubiquitous that only requiring users to have Flash shouldn't be considered needing a plugin. Most browsers are ready to go. (I have nothing to do with this company.)
That was our thought with Twiddla (which will work on your iPhone, by the way).
Flash just adds too much pain for the amount of benefit it gives an app like this. You gain ease of development for some of the graphical stuff, but you lose the ability to overlay it over something else (like a document), the ability to pull in external plugins, and worst of all, you lose the right-click.
I wish these guys luck (they don't compete with us directly), but I sort of wonder why go with Flash when it's been proven that you don't need it for something like this?
Isn't Flash a plugin? My iPhone browser seems to think so.