The Flash whitelist is only for the formerly-called-Metro immersive browser that will primarily be used on touch-based tablets. It does not affect desktop IE10.
Many Flash apps were designed for big screens and mouse interaction where pointer precision is great. Now you're throwing them onto a screen that's smaller and using a fat finger to emulate a pointer when the Flash app's target areas weren't designed for that.
Now certainly, some Flash apps will work. Other apps will not because they just weren't built with this environment in mind. If the user ends up running one of the apps that fail, they will have a bad experience. It happens all the time with the iPad where Flash doesn't work at all.
To improve the experience, you could make a whitelist of apps that work, or a blacklist of apps that fail. Which implementation you might choose would depend on whether you expect more good or bad apps, the complexity of managing the list, the impact of failure on the user, etc.
Is this really so controversial?