Adobe has a "Pocket PC Exchange" they inherited along with the rest of the Flash related content. It currently holds 13 entries. 5 from the 30 th of June and 8 from the 29th - in 2005.
Contrast this with the number of entries on a place like Handango with 12 606 titles listed.
Sure, one is free and the other is commercial (but with 30+ free downloads), but I think it is a matter of lock in. The Flash player for the pda was not includd by Microsoft - nor is the development version included. While MS gives you hundreds of mb of tools, the Flash player is sold.
Talk about shutting yourself out of the market. Yes, it is a niche - but one dominated by two core groups for software: developers who like to hack their device and try new stuff - and excecutives, who often end up making decisions on tech choices.
And if you can get the first group to make something for fun and show it to the second group - how would that improve the chance for getting the go-ahead for making bigger solutions, either multi-device or pure online?