Yes, because there're aren't Last.fm and Pandora apps, not to mention thousands of games, for free in the app store. The app store that comes free on the hardware. And I totally bought every singe one of the 9,358 songs in my library from the iTunes store.
Say what you want about Apple's approval policies or how the iPad is going to kill babies because it's closed, but the lack of flash is clearly a performance/user experience decision over a political one.