The iPhone was released in the summer of 2007, didn’t support Flash, and wasn’t intended to run third-party apps[0]. After Jobs caved on releasing an SDK, they finally opened the App Store the following autumn. There was never an opportunity for “Flash portals” to compete with the App Store, let alone to influence the decision to support Flash in the first place.
And if you really want to know, read this article from Wired on the topic: https://www.wired.com/2008/11/adobe-flash-on/
Sad that I get downvoted for this, but I already accepted that on hacker news, don't go against all the Apple and Google fanboys.
When I was reading “the only reason they did that was because …”, I mentally substituted the pronouns to read “the only reason Apple didn’t support Flash on the original iPhone was because …”. And then I was left with “The only reason Apple didn’t support Flash on the original iPhone was because Flash portals were competing with their app store”. So that’s the idea that I was confronting. If that’s not the sentiment you were advancing, then the first thing we should do is settle it.