While I don't see much problems in using vfat-filesystems for usb-drives, I don't expect a problem in creating an ext2-filesystem on a flashdrive.
If you
exchange data with windows-systems sometimes, vfat will be more easy to access from both systems.
If you never use windows to read/ write the usbdrive, linux-file-attributes (user, group, rwxr-xr-x) are much more comfortable to use on an ext2-filesystem.