Flash memory is very expensive compared to magnetic media, something like £20 per GB compared to 32p per GB (or about £1 per GB if you go with Raptors), it's also normally much slower than magnetic media.
There are, as has already been mentioned some products that will use normal RAM (still expensive, but much faster) as a HDD, using a battery on board to enable it to retain data when the power is off.
You can also use flash drives as bootable devices at the moment on many modern motherboards, but due to the costs, capacity and speeds involved it's not really practical for a full OS.