Very true. But Flash is quite a complex beast these days. The size of it's final FLV or SWF files is always down to the person creating the original file, or the code used (in the case of YouTube) to do the job for you. Only first hand optimisation can get a file to it's optimum size, compression ratio and quality. This is true of any video format. Optimise or encode any video format badly and the CPU hit will grind a computer to a halt.

The huge advantage with the format as far as streaming formats like YouTube are concerned is that it can do that conversion and encoding on the fly without human intervention. This is a huge step forward from using most other video codec technology where they have to be rendered before uploading.