Why does App builder show 112kB as maximum flash available?

Total flash space of em250 is 128kB. However, a fixed block of 8kB flash is used by Simulated EEPROM, and 8kB is reserved for DATA segment storage, so total flash available for CODE segments, as shown in App builder, is 112kB.

Notice that this 112kB is shared between bootloader image and application firmware. In order to have more flash for application firmware, customers can choose to use a smaller bootloader (standalone bootloader is ~10kB, application bootloader is ~5kB) or take away the bootloader for current development. However, please aware that the node cannot be remotely updated in the field without a bootloader.

More info on reducing flash usage can be found here.