I thought this thread was going to be about the marketplace for short fiction, in which case I'd say flash fiction is kind of old hat, not "taking over" in any way. With the advent of these online twitter-like programs where people blurb, flash seems to work well with the format. Probably why you see more emergence of it.
As for SYW, very rarely does a fellow writer have the time to read 5-10,000 words from a stranger when they sit down in what little part of their day they've dedicated to visiting AW. Better to give 1-2k at most and if you think logically you can apply suggestions on your own elsewhere (likely your mistakes are similar to one another or you can infer how to fix things in other sections if you get enough feedback).