I don't think Adobe acknowledged that flash was a pig (I didn't see that written anywhere), only that moving to emphasize HTML5 for mobile was a better business decision given where the market is now so I don't agree with that part of your question.
Since HTML5 continues to evolve, one has to know that the handwriting was eventually on the wall for flash anyway as a standards-based and natively supported in newer browsers solution should win-out over a 3rd party plug-in in the long run. Adobe is just taking the first step in that direction now with mobile. Microsoft is rumored to be about to do the same thing with Silverlight for largely the same reasons.
I think Apple's main beef about power usage was in playing video. Apple's first iPhone was highly optimized (including hardware optimization) for playing video efficiently. Flash was a general purpose engine that was not optimized for Apple's hardware so it wasn't nearly as power efficient when playing video. Since Apple was trying to make the original iPhone a device that you could watch a full length movie on, this was very important to Apple.
I'm sure this was a solvable problem for flash (to optimize it for Apple's hardware) if the parties wanted to do that, but for whatever reason, Job's decided he didn't want to go that way.