I don't think that wasn't the deal-breaker. Jobs didn't want Flash to become the de facto development environment for the phone. I'm pretty sure he always knew

I don't think that wasn't the deal-breaker. Jobs didn't want Flash to become the de facto development environment for the phone. I'm pretty sure he always knew they'd end up with apps on it, they just didn't pull that together for the first release, thus the HTML song and dance. But if they supported flash, that would reduce a lot of the demand for apps later, and worse - it would be cross platform. So he used the other (still good) reasons - battery life, security, etc. to obscure the real reason - Apple was not yet ready to compete with it on their own terms, so they banned it.