I have 3 phones that are technically very similar, all running on relatively stock versions of Android 2.3.x (all 3 are unlocked, but only 2 are currently rooted, but no major changes on any).
On my LG C710h (Shine Plus), which has a keyboard and 800 x 480 screen, I installed Flash 11.1 from "market". It works with the standard browser and even the Maxon 2.4.6 (and up to 8) browsers, as expected.
On an LG P500h (Optimus One) which does not have a keyboard and only a 320 x 480 screen, "market" does not show Flash 11.1 as installable.
On a Samsung GT-S5660M (Gio) which also has no keyboard and only a 320 x 480 screen, again, "market" does not show Flash 11.1 as installable. As an experiment, I side-loaded Flash 11.1 on the Gio. It installed, but it does not integrate with the browsers. However, it does seem to work with some apps that require Flash to be installed.
From the above results, I am guessing that Adobe has limited Flash officially to devices with a minimum screen size. I expect that the minimum size is either 640 x 480 or 800 x 480.
Does anyone know is this is what is going on, or am I wrong about this?