Flash is very very insecure. Which is why no Apple products come with it on, Jobs wouldn't permit it.
Flash wasn't supported on iOS because it would have killed the App Store and the 30% fees that Apple takes. Jobs wasn't looking at people's security, he was looking at his bottom line.
Going slightly off topic but, I doubt that would've happened. Most apps that cost money back then were generally games, etc. I doubt those would run particularly well in the baby version of Safari they had on there.
And what was the internet full of in those days? Oh yeah, games built in Flash. Even quite sophisticated ones, multiplayer, micro-payments, offline progress and so on. And all revenue went to the developers.
Adobe had working Flash runtimes for iOS, and even came up with various solutions which would work within Apple's rules, but they were all blocked.
A similar problem hobbled the idea of non-app store based HTML apps, which are supported on iOS, but the performance and feature set of the embedded Safari browser used is limited to that found in the early releases of iOS. If you want a good performing HTML app (as Jobs said was the future), you have to distribute it through the app store.