I don't see the logic of your above statement.

I'd love to have an Empeg Mark III, but the oportunity is not there. Do I stop wanting it - or does it become a "total and complete non-issue" - because no competitor in the market has any similar device either?

I read you underline that competitors don'r have Flash either. But the point we are discussing here is that iPhone could have had it, but this oportunity for consumers is missed - and more importantly, the oportunity of having similar (possibly better) technology on it -. This is a fact.
Whether or not it is for you a non-issue is subjective and I fully respect it, but remains irrelevant to those who have other needs from their portable devices and could have benefited from the "banned" technology.