For security reasons, Apple has started the iPhone as a closed OS without Flash or Java support. Any of these things can be added after iPhone gains a strong position in the mobile market.
Opening the iPhone in its 1.0 version would subject this incredibly innovative new device to too much security risk. It is increasingly clear to me that iPhone is Apple's biggest game. It has been said that Apple is betting the company on iPhone. Calculated risks yes, but don't be stupid. Steve has struck the perfect balance for right here, right now.
I want more applications and diversity like the next avid mobilephile. And I'm not the most patient person. But, in this case, I'll wait.