Actually, what she said is likely telling. Flash never even came up. She said, more or less, that "This Apple iPad doesn't work with a lot of my websites. I don't like that. I thought it was an Apple?"
In her mind, Apple="it just works." Sure, she's had Adobe Flash updates here and there, just like other system updates. So she couldn't understand why she typed in
www.myflashsite.com and it suddenly didn't work. It works on her Macbook....in her mind, this is just a keyboard-less tablet version of the Macbook with some neat features included.
Apple has created an entire legion of users who expect everything they use with the Apple logo to be easy, no fancy work-arounds-needed, fun and productive. Thats an awesome brand reputation. But when you build a rep like that you have to be willing to work to ensure it remains consistent. Maybe Steve is right and Flash would complicate the iPad and detract from the brand he's built. But as they continue to move down the path of consumer electronics, they will expose more and more layers of absolute neophytes that buy their product and don't have a clue about why something works or doesn't, will never listen to a Stevecast or even know what the heck such 'architectural purity laws' do or don't provide. For them, different means "missing something."
I'll wait around. Either the internet will move to see things Steve's way, or Steve will move to see things differently and adopt Flash with a future iteration. Either way, waiting seems like the answer.