According to https://code.google.com/p/jpegcam/ , development on the .js file needed by this example ended in 2010.
Why? Probably because html5 made Flash (at least any use of Flash to access the camera) obsolete.
Try http://www.html5rocks.com/en/tutorials/getusermedia/intro/ for a basic introduction. Not all browsers support the camera in exactly the same way, but the polyfill is not too difficult, and the results are far superior to anything with Flash.