Those are good questions, and honest concerns.
First, yes, 3G does "Kill battery life," but with regard to Jobs and Apple, they made it seem like Flash was something so much worse. While they never compared it to 3G, the sense was that it was a lot worse than it seems to be.
Maybe a better approach is to say Flash doesn't kill battery life anymore than other Apple implementations of other technologies.
As for the rest of your comment, that's more of an implementation thing. Done intelligently, most of what you are talking about is a non-issue. I'll try to explain.
First, Flash doesn't have to run normally. Flash support can be activated. This avoids the torrent of flash ads that can run rampant on websites. However, if I go to a website, and I want to run the application there, I can choose to enable it. Something like this is already done with the YouTube app on the iPhone. You go to a video page, and you click on the Play button, a simple image. In Flash's case, it would explicitly enable the flash player to activate.
People do this already in browser. They block flash for the most part, and enable flash in certain, particular cases.
As for backgrounding v.s. native apps, that's a non-issue. Native apps will always be better, on any platform. The problem is, not every web app can have a native iPhone app.
In your example, the flash web page could be treated like every other web page. In this case, does an HTML5 video continue playing if you open a new tab? Does it keep executing in the background?
The idea isn't to recreate the native functionality, but give Flash support so existing media that exists now can be consumed. Media that HTML5 has no support for, and cannot deal with.