I can think of many reasons for Nintendo not to support Flash or HTML5. One of the biggest is of course parental protection so that children do not get access to certain adult content. But another huge one is software, Nintendo doesn't want their users playing Flash games on their systems. Games they make no money off and have no ability to police. Nintendo wants to retain content control and allowing Flash and HTML 5 would do alot of damage to their ability to control content.
Also if gamers were playing free games on NewGrounds or other sites that is time they aren't spending on Nintendo titles. Less time on Nintendo titles leads to less sales and less interest in future Nintendo hardware. Nintendo's not stupid they want to compete by having a browser but they don't want to compete with that browser for their gamers hours and dollars!
-JC7
"In God We Trust - In Games We Play " - Joel Reimer
