Originally? Vector animation. Some scripting was added, to make things like play/pause buttons and the like possible... theoretically possible to make actual programs and games in, and people did do it... but seriously painful, since that's not what it was intended for. But obviously Macromedia saw what people were using it for, and worked on it... and now, it's still not great, but it's actually usable (though, I haven't played with AS3 at all, I hear it's almost decent). Anyone who can look at the latest Flash with all its (not necessarily great but certainly existent) programming tools and say it's intended solely to make vector animations would probably also look at a modern web browser with all its Ajax objects and say it's intended solely to download and display static HTML pages.
That's not to say it's the best tool for the job, for any job you'd care to name... at least when looked at in a vacuum... but then the network effect kicks in, and the best tool for the job is often simply the one that makes programs that the users can use. And the Flash player is pretty goddamn prevalent.
While no one overhear you quickly tell me not cow cow.
but how about watch phone?