If the Milestone was advertised and sold as "Flash Ready" and by doing so suggesting that it was to be updated to 2.2 and Moto doesn't deliver they will have a SERIOUS legal issue on their hands. The EU is very aggressive in these matters especially when consumers are getting shafted. If Moto does indeed choose to neglect the Milestone and not update it they will more than likely be forced by European courts to refund the purchase price of the unit to all existing customers and pay a hefty fine due to false or misleading advertising. If the EU can make MS fold and pay fines then Motorola will be small fish and they will get turned into chum by the courts.
In the case of Flash, let's be clear - it's Adobe who dropped the ball here, not Motorola. They were only going by what Adobe was telling them, it was supposed to be released around the same time as Android 2.0.1 and was thus advertised as such.
Now, for whatever reason, it seems Adobe didn't get their crap together and get it working, and it turns out that for some reason they made it only work with Android 2.2+, even though they claimed it was supposed to be working much sooner. Perhaps, they didn't see acceptable performance prior to 2.2 with the new JIT compiler - but for whatever reason, the lack of Flash is Adobe's fault.
However, since there finally IS a version of Android that works with Flash; and it works on the Motorola hardware; it SHOULD be released. I think the jist of the statement by Moto is that it's not strictly up to them, and it all depends on how the various carriers feel about it. Moto cannot directly release an OS, and if a given carrier doesn't want to test/approve a build, Moto can't really force them to.