Fly would only be a great hindrance before Cinnabar is reached. After that, there would be no "overworld dungeons" it could teleport Red out of. As soon as you can fly to every city, everywhere you would ever go is within walking distance of a Fly location, with only two examples that I can think of - the road to the Power Plant and the area leading up to Victory road. Then again, with the latter being a maze, as well as the distance between the end of Victory Road and the Elite Four building itself being open-air, perhaps it would be best to stay away from Fly entirely.