"Flash cross-compiled apps on iPhone == Bad" because it's not... open... Neither stated nor implied. The logic doesn't "match up" because it's a separate issue, addressed with different arguments:
"We have discussed the downsides of using Flash to play video and interactive content from websites, but Adobe also wants developers to adopt Flash to create apps that run on our mobile devices."
He then goes on about third-party middleware, e.g.:
"We cannot be at the mercy of a third party deciding if and when they will make our enhancements available to our developers."
Jobs does not make the openness argument in reference to Apple's proprietary platform at all. It seems to me that you have to ignore the last third of the article to think that he was.
He's trying to come off as an 'open crusader for the web against Adobe'
Is Jobs lying when he says Apple supports open web standards?