That example shows a poor understanding of how people use the web and a very poor use of screen real estate.
Personally I like the flat style of sites especially the new Google logo, which is very clean and professional. I use flat styles on sites I develop at work (I'm not a designer but I implement). But it has to be done well and you should not just follow a trend without reason or an understanding of the benefits.
Just with web 2.0 and the glossy/glass buttons we saw plastered everywhere for no reason, it will take time for people to work out what works and what doesn't.
When they do though I think we will see a much nicer web, I hated with a passion glass/3d buttons.
For an example of a site I think does the flat UI well see
http://inky.com/ The reason they have done it well is they have used the screen space well and have obviously thought about all types of user in the making of the site, not just done for the sake of it.