Listening to Monday's SDR episode, there was a segment about an experienced Flash developer who recently posted a few reason as to why Flash doesn't belong on a touch-based device. The article mentions the 'hover issue' and the 'right-click issue' but I think it missed another valid issue; scrolling the page vs. being able to drag elements around. The problem is that the browser's default behavior for 'touch and drag' is scrolling, not dragging.
This problem is not isolated to Flash apps. I tried to use a web app yesterday which uses jQuery to power the user experience. It allows users to drag DOM elements around the page and it simply didn't work; Every time I tried to drag an element the whole browser would scroll in the direction I was dragging.