Flat whites are supposed to be small 5-6 oz. drinks made from a shot or two of espresso and steamed milk. They differ from lattés primarily in volume and from cappuccinos primarily in their less foamed texture. They're also by definition (as far as I can tell) sold in a small ceramic cup, i.e. they are not supposed to be to go drinks in paper cups.
If Starbucks has taken the term and applied it to large milky drinks—their forté—then of course the meaning is lost, and they're just trying to fake trendiness.
As to latté art, it's a generic term and you can pour it in any drink that physically supports it--macchiatos, mochas, cappuccinos, hot chocolates/steamers/whatever you call chocolate sauce + steamed milk, etc. So it's not a misnomer to call it latté art on a flat white. There's still a difference, though it's hidden by Starbucks' (and any other café that sells cappuccinos and lattes in 12 oz/16 oz/20 oz sizes) willingness to bastardize just about any espresso-based drink name.