The thing is, HTML5 is far more technically capable than Flash ever was. It was competitive even at the time: Flash's main thing was 2D vector graphics, but iOS Safari has supported both Canvas and SVG since at least 2010, possibly from day one.

But the creation tools and the culture never really lined up the same way, and developers focused on creating apps instead.

For non-games, HTML has always been technically superior. iOS Safari may have a long history of rendering bugs, but it beats Flash/AIR, which always looked very out-of-place even on desktop.

I do wonder what would have happened in an alternate universe where either Flash or HTML5 took off on mobile instead of apps. We would have both the upsides of openness, and the downsides of worse performance and platform integration and the lack of an easy payment rail. Pretty much the same situation we still see on desktop today.

We wouldn't have had the same "gold rush" from the early App Store, which happened in large part because of the ease of making money. There would probably be more focus on free stuff with ads, like Android but more so.