That quote was from Apple's rep in direct response to Adobe's project manager.

Closed environment? With a published SDK, freely downloadable build environment and tools, plus documentation and example code.... The iPhone platform is anything but closed. It's controlled, I'll give you that. And perhaps too tightly controlled in some respects, which I'll give you as well. But it's the complete opposite of a closed environment.

Now if you wanted to say that the Nintendo Wii, DS or Sony Playstations are closed I might be inclined to agree with you.

By the way... The last great hope for Flash, that game everyone's mom is playing, Farmville, is coming to the iPhone (and iPad) as a native app. Seems like developers can't jump Adobe's ship fast enough.