This is not exactly true. You can indeed use dump_image from adb to dump any partition. I've done it myself all weekend. flash_image only works on in fasboot. (for some reason it is not recognizing "recovery" or "boot" but all other partitions in /dev/block/ pull fine)
as for yaffs2 util, I've used it to extract my system partition and data/cache to image files just fine. I then used and unyaffs tool to extract the image files.
In my WIP ROM, Im formatting system and data using yaffs2, and its booting just fine.
On an unrelated note, My phone is borked. lol
I was using dd to extract partitions on my phone when my cat jumped up on my lap, spilling my phone to the ground (which was still dumping a bml partition). The battery flew out, and it powered off -- when I powered up, I found that I had ZERO cell service.. Tried reflashing, going back to stock,, everything. So I concluded that the partition I was dumping when the phone powered off unexpectedly must have had something to do with cell service programming. So I need to take the phone in, and possibly get an exchange (or refund/repurchase) before I can proceed more on this phone. ><