initrd usage

What if mounting your root filesystem requires kernel-modules to be
loaded which reside on the root filesystem ?

| I read Documentation/initrd.txt but still can't understand why to use
| initrd. Why can't we mount filesystem located on a flash without any
| intermediate entities like 'initrd' or similar?

If you build a kernel with the necessary driver(s) to access the flash and
the necessary filesystem(s) to understand what is on that flash, then sure,
you can do exactly that.  One of the things initrd can do is let you have
modules loaded separate.  This is valuable for distributions for a wide
range of system types which would otherwise require many drivers be built
into the kernel, bloating it.  But for a custom kernel for exactly one
embeeded system type, you should know exactly what drivers you need, at
least for the integrated parts (plug in components would be a different
issue).  The on-board flash would be one of those and I do recommend that
it's drivers and filesystems be integrated into a kernel build.