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The main reason is that almost all flash websites are a huge pain in the ass to use, you can't link within them, you (usually) can't copy text out of them, and they generally put whiz-bang visuals above the users' ability to, y'know, use them.

SEO is still quite valid. Accessibility is/was also an issue (screen readers, etc.) In addition, today, more and more people have HUGE monitors, and I have -never- seen a good fluid width/height flash site.

have you noticed how most flash sites make you wait to load, then put an intro,then when you go in, you have to wait for the site to load again. Then the whole page is about 800x600, and you have to keep clicking to see 10% of what you could normally see on a normal website. I think they also deliberately make all those flash page scrollers narrower than possible.

doesn't work on many platforms including the iphone

Ask HN: Flash websites?