This would seem to be a "judgement call". Since it rather clearly spells out the intended consequences of succeeding
Those who remain standing can move at only half normal speed.
and makes no reference to Balance rules beyond allowing the check, it would seem to that flat-footedness is not an intended consequence of the spell. Likely, the Balance option was added because of the narrative description (and playtesting) and not for balance or other mechanical reasons.
However, the SRD has this to say about the "Flat-Footed" condition (emphasis mine, obviously).
A character who has not yet acted during a combat is flat-footed, not yet reacting normally to the situation.
Obviously, that probably lends itself to too broad an interpretation of the condition but combined with the text from Balance it could certainly be used to justify a successful Reflex save as flat-footedness.
You are considered flat-footed while balancing, since you can’t move to avoid a blow.
For me, here's what it comes down to; spells are not required to allow saves and using the savings throw or the Balance skill have equal outcomes outside the first round. Given that, if you intended the spell to represent a continuous need for balance Why allow a Reflex save at all?". It seems probable to me that since Reflex saves are generally instantaneous reactions that both checks are more about avoiding being knocked down by a sudden instability than a general state of imbalance. As such I'd be far more likely to ignore the penalty on Balance than apply it to characters using Reflex.