People know that Flash is used by websites like Youtube and some game sites. It's not "mandatory" but not having it can limit what sites you have fun with. It's also a very good idea to keep your Flash up to date as new security exploits are found. But if you EVER see a website telling you that you must update Flash, close that tab. Flash can and will run if it's a little out of date (within reason). The goal here is to trick you into downloading something that may or may not update Flash but absolutely will install various garbage softwares (or even viruses) onto your system.
The good news is that Flash is being phased out. Youtube is moving towards "HTML5" which needs no special addons to play videos in your browser -- you can already go here and tell Youtube that you'd prefer it.
Full article on Kaspersky's blog