I heard that they refused to work with Apple to improve its performance on Mac, and that was a core reason why they got excluded from the iOS platform -- searching for this I came up with an explanation directly from Apple:
"Symantec recently highlighted Flash for having one of the worst security records in 2009. We also know first hand that Flash is the number one reason Macs crash. We have been working with Adobe to fix these problems, but they have persisted for several years now. We don’t want to reduce the reliability and security of our iPhones, iPods and iPads by adding Flash."