Hi Steve,
Yes, at the other thread where this subject was posted the issue about flash incompatibility was already mentioned, so it seems that a choice had to be made, between letting more people having access to the contents or complying with the requirements of the copyright owners.
I like your suggestion about converting the documents into another format, specially one that would get the most from Moodle. While that would definitely be the best choice, it will surely take more time than just converting into swf