Beyond that, the bigger issue to my eye is that it doesn't always work out. If your boss flirts with you and you aren't interested, that puts you in an awkward position. What if saying no makes them upset with you, or just negatively colors their perception of your work in the future? (Human beings being what we are, it's hard for a negative feeling about someone in one context to be entirely compartmentalized away from our judgement about them in another.)
Also, whether it works out or not: If romantic attachments between supervisors and subordinates are an accepted part of the culture of this workplace, what are the odds that the boss's attraction to you factored into your hire? Are your colleagues aware that the boss is attracted to you? Does that undermine their confidence that you got your position based on talent? Does it undermine your confidence that you got the position for the right reasons? (Might the boss think that you owe them some sort of sexual payoff for the job? There's a comforting thought as you try to do your job.)
I'm not saying that any of those suspicions or worries are justified in most cases! I'm sure that most people do a decent job of separating their work responsibilities and their personal lives, even in these sorts of circumstances. But a culture that accepts supervisor-employee relationships invites this class of concerns in a way that a culture that prohibits them would not. (And maybe my thoughts here really are influenced by thinking about this in a grad student context: Ph.D. advisors have a truly astounding amount of power over their students' futures.)