Basically flash web page are meant for high end broadband connections, it pretty in terms of size and take a while to load. Lower end users who use slower connections take longer to load the flash pages, if everyone of them is patient then that's not issue but frankly internet users are fickle and impatient so if it takes any longer than a minute then they'll probably move on to the next. This is where static sites trump flash websites.
Now, going halfway isn't bad, it really is much more widespread than going to the extremes of purely flash or purely static. The conserves space and is acceptable to people who want their pages to load faster. In the ends its just about finding balance between the elements in internet design.
Naturally Flash is also applied for creating Flash templates and Flash site designs.
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