Don't lose sight of the issue. 3.3.1 is the issue, not "Flash on the iPhone". By reframing the argument as "Flash on the iPhone", you are succumbing to misdirection.
I think one of the main reasons they published this was so they could respond to “iPhone doesn’t even have Flash.”
His point is that on the mobile web, HTML5 is open, not Flash.
He's trying to come off as an 'open crusader for the web against Adobe' because 'Adobe is not open,' but on the other hand shoving Adobe (and others) off of the i{Phone,Pad} platform because it's not part of Apple's own 'not open' environment. I hate Adobe as much as the next person, but let's not dress Steve Jobs up as a knight in shining armour just because he also doesn't like Adobe.
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?