Presumably it's "as long as you're using the Cocoa Touch stack as your primary development environment, we don't care what other tools you use; however, if you want to use Flash, develop for a different phone."
Since my memory span goes more than a year or two back, I vividly recall Apple shipping a product that had native app development available only to Apple. I simply don't believe that Apple owes everyone Flash.
Maybe this will get different when Apple owns 70% of the smart phone market. Right now, people are upset about not being able to use their preferred tools on the coolest phone. But they have no inherent right to develop on the coolest phone.
Some of us have already invested over a grand buying Macbooks and Unity licenses and test iPod Touches specifically so that we can develop games for the iPhone, though... Would have been nice to have known in advance that this would be ruled out!
This is a step above just saying, "It's our ball, you can't play!" This is waiting until someone goes and buys a bat and only then telling them they can't play.
And that's where you lose me. It sucks to be out $2000 and having the terms changed on you. I hope they get refunds. But keeping Adobe out of the iPhone dev tools market doesn't suck at all. It's a totally rational decision and while it is not the decision I would make, I will in the end probably benefit from it.
I agree with you: the fact that this is happening to Adobe mitigates it somewhat for me, but that doesn't make the maneuver in the abstract any less severe. This is getting to the level of Microsoft telling everyone that the MFC is the way to go, but later on people discover that Microsoft is using something else internally for GUIs.
OK, I'll bite. What's the correct interpretation, according to you?