Not true on a private network, you can just take care of the trouble makers, no differnt then a forum.
IRC is powerful because it gives the client more then one way to connect. I can use a java-client on my site (no worse then flash as it also requires a plug-in to run), or I can give them the server details and they can use whatever software they want from the desktop.
I know it ain't for everyone, but I honestly couldn't go back to something like flashchat. The only thing these scripts have that IRC doesn't in user intergration, but like I said I've been thinking about that one myself and I am looking into for a site I've been planning to do for some time.
Just wanted to drop in my input aswell, happy hunting.