They were basically four uses of Flash on the Internet. Some people used it to make entire websites, which generally ended up looking nicer but been much harder to use (I am STILL looking at you HBO). I was didn't work on the iPhone at all.
Next up you had games, which also didn't work on the iPhone. Games basically all assumed a mouse and keyboard so the chances of them actually working well if you try to play them on an iPhone would've been terrible anyway.
A highly despised use with advertising. Thanks to the incredible power of flash not only could pop ups be made, but you could have dancing around little distracting graphics with lots of sound and even video sucking up all your bandwidth.
But the most important thing you have to remember is that flash absolutely sucked down resources. On a (at the time) recent laptop you could easily tell when a website loaded flash. Not only did things respond better with flash off but battery life could be significantly affected. You could get extra hours on your computer. And if you think flash on windows was bad, you should've tried living in the Macintosh ecosystem. Adobe clearly didn't care so flash performance was drastically worse.
If it was bad on a laptop, you know how much worse it would've been on the original iPhone. The original (and even the 3G) were very constrained devices. Even if flash could've been put on them, I doubt it would've been performant at all for real content.
I think Apple was completely correct. I had already started using a flash blocker by that point just so my laptop wouldn't get too hot and drain the battery too fast. There were better ways to do video, answer now less of noxious since they can't play sound, and games run better than ever since they are apps.
Incredible popularity of the iPhone and the iPad was the thing that finally put flash out of its misery you. It should've died long before that for being so on optimized but no one else had enough power to do it. Apples move did more than anything else to get us into the modern HTML5 Web 2.0 world. I imagine there'd still be tons of flash only sites if it wasn't for the iPhone.
When flash died, html+js was far from a viable replacement. And many appstore games were clones of earlier flash games.