There is no major problem for me, other than the couple of hours it took to recode all the FLAC files. It's just irritating for anyone who has a large library of stuff in FLAC who comes to itunes. It seems to be something that is an issue for quit a lot of people (google "playing FLAC in itunes"). The question should be, what is the problem for Apple in supporting it?
The number of hits in Google something gathers is rarely meaningful. I would really suspect the lack of mainstream demand to be a factor here. I would also suspect that people who use FLAC to encode their CD collection aren't in Apple's target market.