People are really overreacting to this. It's just like the $1199 pre-order price story. The Engadget story is comical - they didn't even attempt to contact Motorola or VZW for clarification. There's no way the device doesn't support Flash 10.1 at least out of the box. It works on the Nook w/Honeycomb and Tegra-based phones, doesn't it? Moto advertised Flash with no caveats or footnotes - they'd be open to legal action if it weren't true.
This is a classic Engadget attempt to drive clicks and comments. I know what the VZW ad says, but at least attempt to get some clarification before running with it. That's Engadget for you though.