I second that, ventilator.
I have to admit I am no expert in d3d or anything but, seeing that MED can do flat shading while, at the same time, using a directX render library, there certainly has to be a solution to do this same effect in the engine.
Plus, as ventilator stated, other engines -many other engines- support this as well...

I'd really like to hear a word or two from Conitec on this issue.