I wouldn't describe the flash IDE as fantastic. The only reason it's passable is because it's really the only game in town. It's slow, its UI could use a lot of cleanup, and its code editor is particularly slow and lacking features (as compared to XCode or Visual Studio).
I think people use Flash because it's the best (major) browser-targeted tool that handles animation design decently.
Flex definitely won't output to FXG. FXG is simply a declarative graphics specification. Don't expect ActionScript to port over to JavaScript reliably using this tool.
I think people use Flash because it's the best (major) browser-targeted tool that handles animation design decently.