Not sure I see where the expense is coming from there. What do you have to convert your Flash content to, in order to use it with HTML5?
The lack of Flash on this device, along with the iPhone and iPod Touch, is nothing new and is not just an Apple thing.
The Zune HD has no Flash, the Palm Pre has no Flash, and the newly introduced Nexus One has no Flash also.
The iPhone demonstrated that there really wasn't a real need for Flash and a lot of sites that used it, created a version of their site specifically for the iPhone, with no Flash.
Flash is no longer necessary as most of what it could do can be achieved by using HTML standards or Java instead of relying on proprietary code like that from MS and Adobe.
Flash is on the way out and, just like old soldiers, will just fade away.