Why didn't the installer just check the version of the currently installed Flash player? If it's a higher version than the one bundled with the OS - don't touch it! BAM - problem solved!
Again, because we're not talking about an update. We're talking about an OS reinstall. They would have to leave Safari alone also, because the Flash install targets the browser and version. That's essentially untenable, especially when the vulnerability we're talking about requires the user to go far, far out of their way to trigger. There has not been a single report of this exploit hitting an unwitting victim.