Is there any flaws with this Attiny 85 schematic?
There's a couple of things, aesthetics aside.

The voltage regulator is unnecessary. The ATTiny can run on USB VBUS (5V) directly.
Add at least one 0.1uf cap to the ATTiny VCC pin.
It wouldn't hurt to add some protection diodes to the USB D+/D- pins.
Programming header?

Here's a reference design from MIT... have a look: http://fab.cba.mit.edu/classes/863.16/doc/projects/ftsmin/index.html