It's the (erasing and) writing that has a finite life in flash memory cells. [link|http://www.findarticles.com/p/articles/mi_m0WUB/is_2000_March_6/ai_60034081|1 Million Write Cycles] is a common guaranteed benchmark.

I would be very surprised if the flash memory chips themselves were wearing out. Maybe the solder connections or the contacts were having problems?

Cheers,
Scott.
(Who has a SanDisk cruzer mini 512 MB and a Corsair Flash Voyager 1 GB and figures he'll never wear them out.)