Try a Super Search on flat file and you'll find some good posts about the topic.

The most common opinion is that your data processing requirements will grow beyond what they are today. Updating and maintaining your flat file solution will become more and more of a pain. Eventually, someone (probably you) will need to replace it with a more robust solution anyway. So, why not start with a more advanced solution now and save yourself the trouble down the line?

Believe me its more fun to learn about SQL or DB files, than to kludge another feature onto a home-grown solution.

-Blake