Apple avoids supporting some digital media formats for two reasons, they can't or they won't.
When they can't it's because they think the formats need too much memory, or CPU power, or battery. There are 50+ video formats out there, and putting code in the Ipad IOS for every one of them would certainly bloat it up quite a bit.
When they won't it's because of political battles, egos, and marketing strategy.
Their stated reason for not supporting Flash in the Ipad/Safari is that Flash code is inefficient and places a high strain and drain on the battery. That's true to some extent, but there is some political/ego involved too.
Time will tell. As the mobile computing market grows, media suppliers will slowly realize they are missing a huge market by using media formats that are not supported. So they will change their content. If you own a Flash based website and realize you can't reach several million Ipad users, what would you do?
The death of Flash will not hurt us. The death of most of the video formats will also be good for us.