The F27 had a nasty habit of weathercocking in strong cross winds, (the 500 series more so due to the increased length) also the single nose wheel did not provide very much grip and control. In a very stiff x wind (29 kts was the limit i seem to remember) it was important to maintain full aileron into wind opposite rudder to prevent weathercocking, with flaps 40 the "barn doors" increased the problem so were retracted on landing so as to help with direction control, the secondary effect to increase weight on the landing gear to assist. Braking with full rudder was an art in itself! one knee up at your chin and the other leg fully extended, this coupled with the pnumatic brakes was a real hand (or foot) full!!
Air uk standard SOP was to retract the flaps on landing for the above reasons. I also know the crew involved with the incident you are referring too, If you hear their story first hand it is very frightning and sobering indeed, thank goodness only slight injuries to the crew and all returned to flying, all passengers were evacuated without injury as far as i can remember.