Pellets are preferred over flakes due to the fact that they are more nutrient dense, and much more stable in water. For species of fish over 2-3 inches, pellets are clearly the most optimum method of providing nutrition to your fish. Not only can you feed much less on a volume basis, but pellets will also remain stable in the aquarium for an extended period of time.
By their very design, flake foods are paper-thin; absorb water very quickly, and while doing so leach out much of the water-soluble vitamins in a very short period. Some studies suggest that once flakes are added to the aquarium, the majority of water-soluble vitamins (such as vitamin C) are leached out of a flake food within 60-90 seconds.