Why hasn't a smartphone capable of flash come out yet? You'd think they'd all be scrambling to be the first, wouldn't you? And if one has already come out, why aren't all the others on board with it yet?
Three (and a half) reasons:
1) Steve Jobs, even from beyond the grave, has a tendency to act like a petulant child when the world doesn't bow down to him.
2) Adobe sucks and should be destroyed. By extension:
2a) Adobe, for whatever reason, seems to be incapable of writing any kind of phone-based Flash that doesn't completely suck in terms of performance. (There's an argument that suggests they can't do it for full-blown-PCs either, but that's a different discussion.)
3) HTML 5 has rendered Flash largely unnecessary, so right now it's a matter of getting people off of a de facto standard onto a, well, standard.