So we can partaily blind people now?
Awsome. I fear this might be annoying spam, but still cool.
I think this isn't as abusable as much as other events - the general "setHealth", "addHealth" and "kill" events do the same thing as setDamageFlash except injure you as well. In any case, it's impossible to permanently blind people as it only applies to the player. (so Self Delete fixes spam problems)
I've used the events in several places, to good effect - I made a level similar to the Tutorial "Ride" part, where entering electrified water moved you back to a spawn and flashed the screen red, but didn't actually harm you.