Totally different monsters, Tethering was a simple Proxy implementation, Flash require API frameworks and specifics hardware acceleration.
also the amount of code to implement that would be almost impossible to sneak by the review process (it will be a lot of code). The proxy it's a lot easier to sneak by, however the real worry to me is "trojan" like application that require as little code as this tethering application and they can sneak also as easily.