For T5, you do need the flash memory for expansion pack voices, installed via YEM, which are entirely optional.
You don't need flash memory for new styles that only use the inbuilt voices. So you don't need it for the thousands of style files available for download on this site. Many expansion packs come with custom styles, which use the voices from the pack, so for those you do need the flash for them to sound right.
@frankmusik: My T5 came with the 1GB module installed. If it wasn't so expensive I'd swap if for a 2GB module .... but only Mutec make it so they can charge what they like!
On your last point - Genos does come with 1.8GB expansion memory built in, so it seems Yamaha have decided to ship it as standard now.
And worth just repeating the point, if you haven't downloaded any styles from this site yet then there's nothing stopping you doing it.