Check out Steve Jobs' open letter  on why Apple does not allow Flash on its mobile devices.
Jobs gives a number of reasons why Flash is not supported, including: a lack of open standards, a diminished demand as the newer (and supported) H.264 format is rapidly growing, reliability/security/performance issues, battery life, and limited support for the touch interface.
Why is the Apple / Adobe kerfuffle worth our attention? 3 Reasons:
1. Curricular Media: We need to figure out how to have our curricular media play on all platforms and browsers. The appeal of Flash, up until now, has been that it is cross-platform / cross-browser compatible. But now that Apple has made what seems like a final stand that Flash will not appear on the iPad/Touch/iPhone/iPod etc. the appeal of Flash is significantly less. What format we should be standardizing on for curricular media is an important question. H.264? Will this play on everything, and avoid our students and faculty running into problems?
2. Synchronous Meetings and Webinars: Adobe Connect Pro  is, for my money, the best synchronous meeting tool on the market. I've used them all, and Connect provides the most elegant user experience and options for interactivity. My question is will this Flash dead-end impact the value proposition of Connect? Already, Connect is limited in that it cannot export recordings of meetings that can be played on mobile Apple devices. Adobe needs to build in an H.264 export function. Down the road, I could see synchronous meetings on iPads/iPhones (when they get that front-facing camera) becoming an attractive option. Has anyone used Adobe's Connect Pro iPhone app?  I'm concerned that Apple will use its tight integration of hardware and software to create amazing conferencing / synchronous communication down the road, making it difficult for Adobe's Connect Pro mobile offerings to compete.
3. Adobe's Roadmap: I can't see how this dispute between Apple and Adobe over Flash benefits any of us in the long run. Adobe currently has some large gaps in its product lineup, particularly with lecture capture and cross-platform / low-cost screencasting tools. The Techsmith  line-up of Jing, Camtasia, and Relay (all of which are cross-platform), almost perfectly fills the gaps in Adobe's offerings. But competition is good, and with AIR and Adobe's resources, they could move in a big way into these markets. However, whatever Adobe does, it's content will need to somehow work on Apple mobile devices. I hope this Flash dispute does not limit our choices of products and partners.